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As filed with the Securities and Exchange Commission on June 24, 2021

Registration No. 333-255079

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

AMENDMENT NO. 2

TO

FORM S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

SUPERNOVA PARTNERS ACQUISITION COMPANY, INC.*

(Exact Name of Registrant as Specified in Its Charter)

 

 

 

Delaware   6770   85-2800538

(State or other jurisdiction of

incorporation or organization)

 

(Primary Standard Industrial

Classification Code Number)

 

(I.R.S. Employer

Identification Number)

4301 50th Street NW

Suite 300, PMB 1044

Washington, D.C. 20016

(202) 918-7050

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

 

 

Robert D. Reid

Chief Executive Officer

Supernova Partners Acquisition Company, Inc.

4301 50th Street NW

Suite 300, PMB 1044

Washington, D.C. 20016

(202) 918-7050

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

Copies to:

 

Jonathan Corsico

Simpson Thacher & Bartlett LLP

900 G Street, N.W.

Washington, D.C. 10022

(202) 636-5500

 

Roxane Reardon

Marisa Stavenas

Michael Wolfson

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

(212) 455-2000

 

Justin Hamill

Josh Dubfosky

Marc Jaffe

Drew Capurro

Latham & Watkins LLP

885 Third Avenue

New York, New York 10022

(212) 906-1200

 

 

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this registration statement is declared effective and all other conditions to the business combination described in the enclosed proxy statement/prospectus have been satisfied or waived.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box:  ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering:  ☐


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If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering:  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

 

Large accelerated filer

     Accelerated filer  
Non-accelerated filer      Smaller reporting company  
     Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.  ☐

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)  ☐

Exchange Act Rule 14d-l(d) (Cross-Border Third-Party Tender Offer)  ☐

 

 

CALCULATION OF REGISTRATION FEE

 

 

Title of each class of

securities to be registered

 

Amount

to be

registered(1)

 

Proposed

maximum

offering price

per security

 

Proposed

maximum

aggregate

offering price

 

Amount of

registration fee(5)

Class A common stock, par value $0.0001 per share (2)

  212,151,678(3)   $10.15(4)   $2,153,339,531.70(4)   

$234,929.34

 

 

 

(1)

All securities being registered will be issued by Supernova Partners Acquisition Company, Inc., a Delaware corporation (“SPNV”), the continuing entity following the business combination, which will be renamed Offerpad Solutions Inc. (“Offerpad Solutions”), as further described in the proxy statement/prospectus.

(2)

Pursuant to Rule 416(a) of the Securities Act, there are also being registered an indeterminable number of additional securities as may be issued to prevent dilution resulting from stock splits, stock dividends or similar transactions.

(3)

The number of shares of Class A common stock, par value $0.0001 per share, of Offerpad Solutions (“Offerpad Solutions Class A common stock”) being registered represents (i) the sum of (a) 185,176,657 shares of Offerpad Solutions Class A common stock to be issued in exchange for outstanding shares of capital stock of OfferPad, Inc., a Delaware corporation (“Offerpad”), in connection with the business combination described herein, and (b) 26,975,021 shares of Offerpad Solutions Class A common stock reserved for issuance upon the exercise of options to purchase common stock of Offerpad outstanding as of June 16, 2021 and that may be issued after such date pursuant to the terms of the Merger Agreement described herein, multiplied by (ii) an exchange ratio of 7.533 shares of Offerpad Solutions common stock for each share of Offerpad capital stock.

(4)

Estimated solely for the purpose of calculating the registration fee, based on the average of the high and low prices of Class A common stock, par value $0.0001 per share, of SPNV (“SPNV’s Class A common stock”) on the New York Stock Exchange on April 1, 2021 ($10.15 per share of SPNV’s Class A common stock) (such date being within five business days of the date that this registration statement was first filed with the SEC). This calculation is in accordance with Rule 457(f)(1) of the Securities Act.

(5)

Previously paid.

* 

All securities being registered will be issued by Supernova Partners Acquisition Company, Inc., the continuing entity following the business combination, which will be renamed Offerpad Solutions Inc.

 

 

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the registration statement shall become effective on such date as the SEC, acting pursuant to said Section 8(a), may determine.

 

 

 


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The information in this preliminary proxy statement/prospectus is not complete and may be changed. The registrant may not sell the securities described in this preliminary proxy statement/prospectus until the registration statement filed with the Securities and Exchange Commission is declared effective. This preliminary proxy statement/prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

PRELIMINARY—SUBJECT TO COMPLETION, DATED JUNE 24, 2021

PROXY STATEMENT FOR

SPECIAL MEETING OF STOCKHOLDERS OF

SUPERNOVA PARTNERS ACQUISITION COMPANY, INC.

(A DELAWARE CORPORATION)

PROSPECTUS FOR 212,151,678 SHARES OF CLASS A COMMON STOCK OF SUPERNOVA PARTNERS ACQUISITION COMPANY, INC.

WHICH WILL BE RENAMED “OFFERPAD SOLUTIONS INC.” IN CONNECTION WITH THE BUSINESS COMBINATION DESCRIBED HEREIN

 

 

On March 17, 2021, Supernova Partners Acquisition Company, Inc., a Delaware corporation (“SPNV”, “we” or “our” and, following the Closing, as described below, “Offerpad Solutions”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Orchids Merger Sub, LLC, a Delaware limited liability company and a direct, wholly owned subsidiary of SPNV, Orchids Merger Sub, Inc., a Delaware corporation and a direct, wholly owned subsidiary of SPNV, and OfferPad, Inc., a Delaware corporation (“Offerpad”). The transactions contemplated by the Merger Agreement are referred to herein as the “Transactions”.

In connection with the business combination Transactions, SPNV will change its name to “Offerpad Solutions Inc.”

As a result of and upon the closing of the Transactions, among other things, all outstanding equity interests of Offerpad will be cancelled in exchange for the right to receive, in the aggregate, a number of shares of Class A common stock (or, in the case of outstanding Offerpad options, options to purchase shares of Class A common stock on a net exercise basis) of Offerpad Solutions that is approximately equal to the quotient obtained by dividing (x) $2,250,000,000 (i.e., Offerpad’s implied valuation in the Transactions) by (y) $10.00, provided, however, that Brian Bair (or his affiliates), the founder and Chief Executive Officer of Offerpad, will instead receive Class B common stock in Offerpad Solutions. Class B common stock has the same rights as those given to the Class A common stock, except that the Class B common stock will carry 10 votes per share while the Class A common stock will only carry 1 vote per share, thus providing Mr. Bair (or his affiliates) with approximately 36% of the outstanding voting power of Offerpad Solutions as of the closing of the Transactions while holding 5.4% of the outstanding number of Offerpad Solutions common stock, in each case, assuming no redemption of SPNV’s public shares as further described in the accompanying proxy statement.

SPNV has also entered into subscription agreements, pursuant to which certain investors have agreed to purchase at the closing of the Transactions an aggregate of 20,000,000 shares of Offerpad Solutions Class A common stock, for a price of $10.00 per share for an aggregate purchase price of $200,000,000. In addition, in connection with the closing of SPNV’s initial public offering, SPNV entered into forward purchase agreements pursuant to which affiliates of Alexander M. Klabin and Spencer Rascoff, the Co-Chairs of SPNV, agreed to purchase, upon the closing of the Transactions, an aggregate of 5,000,000 shares of Offerpad Solutions Class A common stock and an aggregate of 1,666,667 warrants to purchase one share of Offerpad Solutions Class A common stock, for an aggregate purchase price of $50,000,000, or $10.00 per share of Offerpad Solutions Class A common stock and one-third of one warrant to purchase one share of Offerpad Solutions Class A common stock.

SPNV’s units, SPNV’s Class A common stock and SPNV’s warrants are currently listed on the New York Stock Exchange (the “NYSE”) under the symbols “SPNV.U,” “SPNV” and “SPNV WS”, respectively. Upon the Closing, SPNV’s units will separate into the component securities and will no longer trade as a separate security. SPNV intends to apply for listing, effective at the time of the Closing, of Offerpad Solutions Class A common stock and Offerpad Solutions warrants on the NYSE under the symbols “OPAD” and “OPADWS”, respectively. This proxy statement/prospectus provides stockholders of SPNV with detailed information about the proposed business combination and other matters to be considered at the special meeting of SPNV. We encourage you to read this entire document, including the Annexes and other documents referred to herein, carefully and in their entirety. You should also carefully consider the risk factors described in the section entitled “Risk Factors” beginning on page 45 of this proxy statement/prospectus.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THIS PROXY STATEMENT/PROSPECTUS, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THIS PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.

This proxy statement/prospectus is dated                , 2021, and is first being mailed to SPNV’s stockholders on or about                , 2021.


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SUPERNOVA PARTNERS ACQUISITION COMPANY, INC.

4301 50th Street NW, Suite 300, PMB 1044

Washington, D.C. 20016

Dear Supernova Partners Acquisition Company, Inc. Stockholders,

On behalf of the Supernova Partners Acquisition Company, Inc. board of directors (the “SPNV Board”), we cordially invite you to a special meeting (the “special meeting”) of stockholders of Supernova Partners Acquisition Company, Inc., a Delaware corporation (“SPNV”, “we” or “our” and, following the Closing, as described below, “Offerpad Solutions”), to be held via live webcast at                 Eastern Time, on                 , 2021. The special meeting can be accessed by visiting     , where you will be able to listen to the meeting live and vote during the meeting. Please note that you will only be able to access the special meeting by means of remote communication.

On March 17, 2021, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Orchids Merger Sub, LLC, a Delaware limited liability company and a direct, wholly owned subsidiary of SPNV, Orchids Merger Sub, Inc., a Delaware corporation and a direct, wholly owned subsidiary of SPNV, and OfferPad, Inc., a Delaware corporation (“Offerpad”). The transactions contemplated by the Merger Agreement are referred to herein as the “Transactions”. A copy of the Merger Agreement is attached to the accompanying proxy statement as Annex A.

As a result of and upon the closing of the Transactions, among other things, all outstanding equity interests of Offerpad will be cancelled in exchange for the right to receive, in the aggregate, a number of shares of Class A common stock (or, in the case of outstanding Offerpad options, options to purchase shares of Class A common stock on a net exercise basis) of Offerpad Solutions that is approximately equal to the quotient obtained by dividing (x) $2,250,000,000 by (y) $10.00, provided, however, that Brian Bair (or his affiliates), the founder and Chief Executive Officer of Offerpad, will instead receive Class B common stock in Offerpad Solutions. Class B common stock has the same rights as those given to the Class A common stock, except that the Class B common stock will carry 10 votes per share while the Class A common stock will only carry 1 vote per share, thus providing Mr. Bair (or his affiliates) with approximately 36% of the outstanding voting power of Offerpad Solutions as of the closing of the Transactions while holding 5.4% of the outstanding number of Offerpad Solutions common stock, in each case, assuming no redemption of SPNV’s public shares as further described in the accompanying proxy statement. In connection with the Transactions, SPNV will change its name to “Offerpad Solutions Inc.”

SPNV has also entered into subscription agreements, pursuant to which certain investors have agreed to purchase at the closing of the Transactions an aggregate of 20,000,000 shares of Offerpad Solutions Class A common stock, for a price of $10.00 per share for an aggregate purchase price of $200,000,000. In addition, in connection with the closing of SPNV’s initial public offering, SPNV entered into forward purchase agreements pursuant to which affiliates of Alexander M. Klabin and Spencer Rascoff, the Co-Chairs of SPNV, agreed to purchase, upon the closing of the Transactions, an aggregate of 5,000,000 shares of Offerpad Solutions Class A common stock and an aggregate of 1,666,667 warrants to purchase one share of Offerpad Solutions Class A common stock, for an aggregate purchase price of $50,000,000, or $10.00 per share of Offerpad Solutions Class A common stock and one-third of one warrant to purchase one share of Offerpad Solutions Class A common stock.

At the special meeting, SPNV stockholders will be asked to consider and vote upon:

 

(1)

Proposal No. 1—To consider and vote upon a proposal to approve the business combination described in the accompanying proxy statement/prospectus, including (a) adopting the Merger Agreement and (b) approving the transactions contemplated by the Merger Agreement and related agreements described in the accompanying proxy statement/prospectus—we refer to this proposal as the “business combination proposal”;

 

(2)

Proposal No. 2—To consider and vote upon a proposal to approve and adopt the third restated certificate of incorporation of SPNV in the form attached hereto as Annex B (the “Proposed Charter”)—we refer to this proposal as the “charter proposal”;


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(3)

Proposal No. 3—To consider and vote upon, on a non-binding advisory basis, certain governance provisions in the Proposed Charter, presented separately in accordance with the United States Securities and Exchange Commission (“SEC”) requirements—we refer to this proposal as the “governance proposal”;

 

(4)

Proposal No. 4—To consider and vote on a proposal to approve the Offerpad Solutions 2021 Incentive Award Plan (the “2021 Plan”)—we refer to this proposal as the “incentive plan proposal.” A copy of the 2021 Plan is attached to the accompanying proxy statement/prospectus as Annex G;

 

(5)

Proposal No. 5—To consider and vote on a proposal to approve the Offerpad Solutions Employee Stock Purchase Plan (the “ESPP”)—we refer to this proposal as the “ESPP proposal.” A copy of the ESPP is attached to the accompanying proxy statement/prospectus as Annex H;

 

(6)

Proposal No. 6—To consider and vote upon a proposal to approve, for purposes of complying with the applicable provisions of NYSE Listing Rule 312, the issuance of more than 20% of SPNV’s issued and outstanding shares of common stock and the issuance of shares of Class A common stock and warrants to related parties of SPNV, in each case in connection with the business combination—we refer to this proposal as the “NYSE proposal”; and

 

(7)

Proposal No. 7—To consider and vote upon a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the business combination proposal, the charter proposal, the governance proposal, the incentive plan proposal, the ESPP proposal or the NYSE proposal—we refer to this proposal as the “adjournment proposal.”

Each of the business combination proposal, the charter proposal, the incentive plan proposal, the ESPP proposal and the NYSE proposal (each a “Condition Precedent Proposal” and collectively, the “Condition Precedent Proposals”) is cross-conditioned on the approval of each other. Each of the governance proposal and the adjournment proposal is not conditioned upon the approval of any other proposal set forth in this proxy statement/prospectus.

Each of these proposals is more fully described in the attached proxy statement/prospectus, which we encourage you to read carefully and in its entirety before voting. Only holders of record of SPNV’s common stock at the close of business on                 , 2021 are entitled to notice of the special meeting and to vote and have their votes counted at the special meeting and any adjournments or postponements thereof.

After careful consideration, the SPNV Board has determined that the business combination proposal, the charter proposal, the governance proposal, the incentive plan proposal, the ESPP proposal, the NYSE proposal and the adjournment proposal are advisable, fair to and in the best interests of SPNV and its stockholders and unanimously recommends that you vote or give instruction to vote “FOR” the business combination proposal, “FOR” the charter proposal, “FOR” the governance proposal, “FOR” the incentive plan proposal, “FOR” the ESPP proposal, “FOR” the NYSE proposal and “FOR” the adjournment proposal, if presented. When you consider the SPNV Board’s recommendation of these proposals, you should keep in mind that our directors and officers have interests in the business combination that are different from, or in addition to, the interests of SPNV stockholders generally. Please see the section entitled “Proposal No. 1—The Business Combination Proposal—Interests of Certain Persons in the Business Combination” for additional information. The SPNV Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Transactions and in recommending to the SPNV stockholders that they vote in favor of the proposals presented at the special meeting.

Consummation of the Transactions is conditioned on the approval of each of the Condition Precedent Proposals. If any of the Condition Precedent Proposals are not approved, we will not consummate the Transactions.

In connection with the Merger Agreement, the SPNV Insiders (as defined herein) have entered into the Sponsor Support Agreement, pursuant to which, among other things, such stockholders have agreed to: (i) vote their shares in favor of the business combination proposal and the other proposals included in the accompanying proxy


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statement/prospectus, (ii) not transfer their shares of common stock and warrants (including shares of Offerpad Solutions common stock issuable upon exercise thereof) held by each SPNV Insider immediately following the Closing for a period of 180 days following the Closing Date, subject to certain exceptions, and (iii) certain vesting provisions of their shares.

All SPNV stockholders are cordially invited to attend the special meeting and we are providing the accompanying proxy statement/prospectus and proxy card in connection with the solicitation of proxies to be voted at the special meeting (or any adjournment or postponement thereof). To ensure your representation at the special meeting, however, you are urged to complete, sign, date and return the enclosed proxy card as soon as possible. If your shares are held in an account at a brokerage firm or bank, you must instruct your broker or bank on how to vote your shares or, if you wish to attend the special meeting and vote, obtain a proxy from your broker or bank.

SPNV’s units, SPNV’s Class A common stock and public warrants are currently listed on the New York Stock Exchange (the “NYSE”) under the symbols “SPNV.U,” “SPNV” and “SPNV WS”, respectively.

Pursuant to SPNV’s current certificate of incorporation, its public stockholders may demand that SPNV redeem their public shares for cash if the business combination is consummated. Public stockholders will be entitled to receive cash for their shares of SPNV’s Class A common stock without voting and, if they do vote, irrespective of whether they vote for or against the business combination proposal. If the business combination is not completed, these shares of SPNV’s Class A common stock will not be redeemed. If a public stockholder properly demands redemption, SPNV will redeem each share of SPNV’s Class A common stock for a pro rata portion of the trust account holding the proceeds from the SPNV IPO, calculated as of two business days prior to the Closing.

This proxy statement/prospectus provides you with detailed information about the Transactions and other matters to be considered at the special meeting of SPNV’s stockholders. We encourage you to carefully read this entire document, including the Annexes attached hereto. You should also carefully consider the risk factors described inRisk Factorsbeginning on page 44.

Your vote is important regardless of the number of shares you own. Whether you plan to attend the special meeting or not, please sign, date and return the enclosed proxy card as soon as possible in the envelope provided. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted.

The Transactions described in the accompanying proxy statement/prospectus have not been approved or disapproved by the Securities and Exchange Commission or any state securities commission nor has the Securities and Exchange Commission or any state securities commission passed upon the merits or fairness of the business combination or related Transactions, or passed upon the accuracy or adequacy of the disclosure in this proxy statement/prospectus. Any representation to the contrary is a criminal offense.

Thank you for your participation. We look forward to your continued support.

 

By Order of the Board of Directors

 

Alexander M. Klabin

Co-Chair

 

Spencer Rascoff

Co-Chair

            , 2021


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IF YOU RETURN YOUR PROXY CARD WITHOUT AN INDICATION OF HOW YOU WISH TO VOTE, YOUR SHARES WILL BE VOTED IN FAVOR OF EACH OF THE PROPOSALS.

TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST ELECT TO HAVE SPNV REDEEM YOUR SHARES OF SPNV’S CLASS A COMMON STOCK FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES OF SPNV’S CLASS A COMMON STOCK TO SPNV’S TRANSFER AGENT AT LEAST TWO (2) BUSINESS DAYS PRIOR TO THE VOTE AT THE SPECIAL MEETING. YOU MAY TENDER YOUR SHARES OF SPNV’S CLASS A COMMON STOCK BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT AND WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES OF SPNV’S CLASS A COMMON STOCK WILL NOT BE REDEEMED FOR CASH. IF YOU HOLD THE SHARES OF SPNV’S CLASS A COMMON STOCK IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS. PLEASE SEE THE SECTION ENTITLED “SPECIAL MEETING OF SPNV STOCKHOLDERS—REDEMPTION RIGHTS” FOR MORE SPECIFIC INSTRUCTIONS.

This proxy statement/prospectus is dated                 , 2021 and is first being mailed to SPNV stockholders on or about                 , 2021.


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SUPERNOVA PARTNERS ACQUISITION COMPANY, INC.

4301 50th Street NW, Suite 300, PMB 1044

Washington, D.C. 20016

NOTICE OF

SPECIAL MEETING OF STOCKHOLDERS

TO BE HELD ON                 , 2021

TO THE STOCKHOLDERS OF SUPERNOVA PARTNERS ACQUISITION COMPANY, INC.

NOTICE IS HEREBY GIVEN that a special meeting of stockholders of Supernova Partners Acquisition Company, Inc., a Delaware corporation (“SPNV”, “we” or “our”), will be held via live webcast at                 Eastern Time, on                 , 2021. The special meeting can be accessed by visiting                 , where you will be able to listen to the meeting live and vote during the meeting. Please note that you will only be able to access the special meeting by means of remote communication.

On behalf of SPNV’s board of directors (the “SPNV Board”), you are cordially invited to attend the special meeting, to conduct the following business items:

 

(1)

Proposal No. 1—To consider and vote upon a proposal to approve the business combination described in this proxy statement/prospectus, including (a) adopting the Agreement and Plan of Merger, dated as of March 17, 2021 (the “Merger Agreement”), by and among SPNV, OfferPad, Inc., a Delaware corporation (“Offerpad”), Orchids Merger Sub, Inc., a newly formed Delaware corporation and direct wholly owned subsidiary of SPNV (“First Merger Sub”), and Orchids Merger Sub, LLC, a newly formed Delaware limited liability company and direct wholly owned subsidiary of SPNV (“Second Merger Sub”), a copy of which is attached to the accompanying proxy statement/prospectus as Annex A, which, among other things, provides for First Merger Sub to be merged with and into Offerpad with Offerpad being the surviving company in the merger (the “First Merger”) as a wholly owned subsidiary of SPNV and for Offerpad to then be merged with and into Second Merger Sub with Second Merger Sub being the surviving company in the merger (the “Second Merger” and, collectively with the First Merger, the “business combination” and the business combination, together with the other transactions contemplated by the Merger Agreement, the “Transactions”) and (b) approving the other transactions contemplated by the Merger Agreement and related agreements described in this proxy statement/prospectus—we refer to this proposal as the “business combination proposal”;

 

(2)

Proposal No. 2—To consider and vote upon a proposal to approve and adopt the third restated certificate of incorporation of SPNV in the form attached hereto as Annex B (the “Proposed Charter”)—we refer to this proposal as the “charter proposal”;

 

(3)

Proposal No. 3—To consider and vote upon, on a non-binding advisory basis, certain governance provisions in the Proposed Charter, presented separately in accordance with the United States Securities and Exchange Commission (“SEC”) requirements—we refer to this proposal as the “governance proposal”;

 

(4)

Proposal No. 4—To consider and vote on a proposal to approve the Offerpad Solutions 2021 Incentive Award Plan (the “2021 Plan”)—we refer to this proposal as the “incentive plan proposal.” A copy of the 2021 Plan is attached to the accompanying proxy statement/prospectus as Annex G;

 

(5)

Proposal No. 5—To consider and vote on a proposal to approve the Offerpad Solutions Employee Stock Purchase Plan (the “ESPP”)—we refer to this proposal as the “ESPP proposal.” A copy of the ESPP is attached to the accompanying proxy statement/prospectus as Annex H;

 

(6)

Proposal No. 6—To consider and vote upon a proposal to approve, for purposes of complying with the applicable provisions of NYSE Listing Rule 312, the issuance of more than 20% of SPNV’s issued and outstanding shares of common stock and the issuance of shares of Class A common stock and warrants to related parties of SPNV, in each case in connection with the business combination—we refer to this proposal as the “NYSE proposal”; and


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(7)

Proposal No. 7—To consider and vote upon a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the business combination proposal, the charter proposal, the governance proposal, the incentive plan proposal, the ESPP proposal, or the NYSE proposal—we refer to this proposal as the “adjournment proposal.”

Each of the business combination proposal, the charter proposal, the incentive plan proposal, the ESPP proposal and the NYSE proposal (each a “Condition Precedent Proposal” and collectively, the “Condition Precedent Proposals”) is cross-conditioned on the approval of each other. Each of the governance proposal and the adjournment proposal is not conditioned upon the approval of any other proposal set forth in this proxy statement/prospectus.

Each of these proposals is more fully described in the accompanying proxy statement/prospectus, which we encourage you to read carefully and in its entirety before voting. Only holders of record of SPNV’s common stock at the close of business on                 , 2021 are entitled to notice of the special meeting and to vote and have their votes counted at the special meeting and any adjournments or postponements thereof.

After careful consideration, the SPNV Board has determined that the business combination proposal, the charter proposal, the governance proposal, the incentive plan proposal, the ESPP proposal, the NYSE proposal and the adjournment proposal are advisable, fair to and in the best interests of SPNV and its stockholders and unanimously recommends that you vote or give instruction to vote “FOR” the business combination proposal, “FOR” the charter proposal, “FOR” the governance proposal, “FOR” the incentive plan proposal, “FOR” the ESPP proposal, “FOR” the NYSE proposal and “FOR” the adjournment proposal, if presented. When you consider the SPNV Board’s recommendation of these proposals, you should keep in mind that our directors and officers have interests in the business combination that are different from, or in addition to, the interests of SPNV stockholders generally. Please see the section entitled “Proposal No. 1—The Business Combination Proposal—Interests of Certain Persons in the Business Combination” for additional information. The SPNV Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Transactions and in recommending to the SPNV stockholders that they vote in favor of the proposals presented at the special meeting.

In connection with the Merger Agreement, the SPNV Insiders (as defined herein) have entered into the Sponsor Support Agreement, pursuant to which, among other things, such stockholders have agreed to: (i) vote their shares in favor of the business combination proposal and the other proposals included in the accompanying proxy statement/prospectus, (ii) not transfer their shares of Offerpad Solutions common stock and warrants (including shares of Offerpad Solutions common stock issuable upon exercise thereof) held by each SPNV Insider immediately following the Closing for a period of 180 days following the Closing Date, subject to certain exceptions, and (iii) certain vesting provisions of their shares.

Consummation of the Transactions is conditioned on the approval of each of the Condition Precedent Proposals. If any of the Condition Precedent Proposals are not approved, we will not consummate the Transactions.

To raise additional proceeds to fund the Transactions, SPNV entered into subscription agreements (containing commitments to funding that are subject only to conditions that are generally aligned with the conditions set forth in the Merger Agreement), pursuant to which certain investors have agreed to purchase an aggregate of 20,000,000 shares of Offerpad Solutions Class A common stock, which we refer to as the “PIPE Investment,” for a price of $10.00 per share for an aggregate commitment of $200,000,000. In addition, in connection with the closing of SPNV’s initial public offering (the “SPNV IPO”), SPNV entered into forward purchase agreements pursuant to which affiliates of Alexander M. Klabin and Spencer Rascoff, the Co-Chairs of SPNV, agreed to purchase, upon the closing of SPNV’s initial business combination, an aggregate of 5,000,000 shares of Offerpad Solutions Class A common stock and an aggregate of 1,666,667 warrants to purchase one share of Offerpad Solutions Class A common stock, for an aggregate purchase price of $50,000,000, or $10.00 per share of Offerpad Solutions Class A common stock and one-third of one warrant to purchase one share of Offerpad Solutions Class A common stock (we refer to the foregoing as the “SPNV Forward Purchase”).


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Pursuant to SPNV’s current certificate of incorporation, its public stockholders may demand that SPNV redeem their public shares for cash if the business combination is consummated. Public stockholders will be entitled to receive cash for their shares of SPNV’s Class A common stock without voting and, if they do vote, irrespective of whether they vote for or against the business combination proposal. If the business combination is not completed, these shares of SPNV’s Class A common stock will not be redeemed. If a public stockholder properly demands redemption, SPNV will redeem each share of SPNV’s Class A common stock for a pro rata portion of the trust account holding the proceeds from the SPNV IPO, calculated as of two business days prior to the Closing.

All SPNV stockholders are cordially invited to attend the special meeting and we are providing the accompanying proxy statement/prospectus and proxy card in connection with the solicitation of proxies to be voted at the special meeting (or any adjournment or postponement thereof). To ensure your representation at the special meeting, however, you are urged to complete, sign, date and return the enclosed proxy card as soon as possible. If your shares are held in an account at a brokerage firm or bank, you must instruct your broker or bank on how to vote your shares or, if you wish to attend the special meeting and vote, obtain a proxy from your broker or bank.

Your vote is important regardless of the number of shares you own. Whether you plan to attend the special meeting or not, please sign, date and return the enclosed proxy card as soon as possible in the envelope provided. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted.

Thank you for your participation. We look forward to your continued support.

 

By Order of the Board of Directors

 

Alexander M. Klabin

Co-Chair

 

Spencer Rascoff

Co-Chair

            , 2021

IF YOU RETURN YOUR PROXY CARD WITHOUT AN INDICATION OF HOW YOU WISH TO VOTE, YOUR SHARES WILL BE VOTED IN FAVOR OF EACH OF THE PROPOSALS.

TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST ELECT TO HAVE SPNV REDEEM YOUR SHARES OF SPNV’S CLASS A COMMON STOCK FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES OF SPNV’S CLASS A COMMON STOCK TO SPNV’S TRANSFER AGENT AT LEAST TWO (2) BUSINESS DAYS PRIOR TO THE VOTE AT THE SPECIAL MEETING. YOU MAY TENDER YOUR SHARES OF SPNV’S CLASS A COMMON STOCK BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT AND WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES OF SPNV’S CLASS A COMMON STOCK WILL NOT BE REDEEMED FOR CASH. IF YOU HOLD THE SHARES OF SPNV’S CLASS A COMMON STOCK IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS. PLEASE SEE THE SECTION ENTITLED “SPECIAL MEETING OF SPNV STOCKHOLDERS—REDEMPTION RIGHTS” FOR MORE SPECIFIC INSTRUCTIONS.


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TABLE OF CONTENTS

 

     Page  

Market, Industry and Other Data

     ii  

Trademarks

     ii  

Frequently Used Terms

     1  

Summary of the Material Terms of the Transactions

     6  

Questions and Answers about the Proposals

     8  

Summary of the Proxy Statement/Prospectus

     18  

SPNV’s Summary Historical Financial Information

     35  

Offerpad’s Summary Historical Financial and Operating Data

     38  

Summary Unaudited Pro Forma Condensed Combined Financial Information

     39  

Comparative Per Share Data

     41  

Cautionary Note Regarding Forward-Looking Statements

     43  

Risk Factors

     45  

Special Meeting of SPNV Stockholders

     95  

Proposal No. 1—The Business Combination Proposal

     100  

Proposal No. 2—The Charter Proposal

     143  

Proposal No. 3—The Governance Proposal

     147  

Proposal No. 4—The Incentive Plan Proposal

     151  

Proposal No. 5—The ESPP Proposal

     157  

Proposal No. 6—The NYSE Proposal

     162  
Proposal No. 7—The Adjournment Proposal      163  

U.S. Federal Income Tax Considerations

     164  

Other Information Related to SPNV

     171  

SPNV’s Management’s Discussion and Analysis of Financial Condition and Results of Operations

     181  

Information about Offerpad

     189  

Management of Offerpad Solutions Inc. Following the Business Combination

     198  

Executive Compensation

     204  

Unaudited Pro Forma Condensed Combined Financial Information

     215  

Offerpad’s Management’s Discussion and Analysis of Financial Condition and Results of Operations

     228  

Description of Securities

     251  

Market Price and Dividend Information

     273  

Beneficial Ownership of Securities

     274  

Certain Relationships and Related Person Transactions

     278  

Securities Act Restrictions on Resale of SPNV’s Securities

     283  

Appraisal Rights

     285  

Submission of Stockholder Proposals

     285  

Future Stockholder Proposals

     285  

Legal Matters

     285  

Experts

     285  

Other Stockholder Communications

     285  

Delivery of Documents to Stockholders

     286  

Where You Can Find More Information

     286  

Index to the Financial Statements

     F-1  

Annexes

  

Annex A—Merger Agreement

     A-1  

Annex B—Form of Third Restated Certificate of Incorporation

     B-1  

Annex C—Form of Amended and Restated Bylaws

     C-1  

Annex D—Form of Registration Rights Agreement

     D-1  

Annex E—Offerpad Holders Support Agreement

     E-1  

Annex F—Form of the PIPE Subscription Agreement

     F-A-1  

Annex G—Offerpad Solutions Inc. 2021 Incentive Award Plan

     G-1  

Annex H—Offerpad Solutions Inc. 2021 Employee Stock Purchase Plan

     H-1  

Annex I—Sponsor Support Agreement

     I-1  

 

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MARKET, INDUSTRY AND OTHER DATA

This proxy statement/prospectus includes estimates regarding market and industry data and forecasts, which are based on publicly available information, industry publications and surveys, reports from government agencies, reports by market research firms or other independent sources and our own estimates based on our management’s knowledge of and experience in the market sectors in which we compete.

Certain monetary amounts, percentages and other figures included in this proxy statement/prospectus have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables or charts may not be the arithmetic aggregation of the figures that precede them, and figures expressed as percentages in the text may not total 100% or, as applicable, when aggregated may not be the arithmetic aggregation of the percentages that precede them.

TRADEMARKS

This proxy statement/prospectus also contains trademarks, service marks, copyrights and trade names of other companies, which are the property of their respective owners. We do not intend our use or display of other companies’ trademarks, copyrights or trade names to imply a relationship with, or endorsement or sponsorship of us by any other companies. Solely for convenience, our copyrights, trademarks and trade names referred to in this proxy statement/prospectus may appear without the ©, ® or symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable licensor to these copyrights, trademarks and trade names.

 

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FREQUENTLY USED TERMS

Unless otherwise stated in this proxy statement/prospectus or the context otherwise requires, references to:

Action” are to any claim, action, suit, assessment, demand, litigation, investigation, review, grievance, citation, summons, subpoena, inquiry, audit, hearing, arbitration or other proceeding (whether at law, in equity or otherwise) by or before any governmental authority or arbitral body;

Aggregate Fully Diluted Company Common Stock” are to, without duplication, and in each case after giving effect to the Pre-Closing Restructuring, (a) the aggregate number of shares of Offerpad stock that are (i) issued and outstanding immediately prior to the First Effective Time or (ii) issuable upon the settlement of Offerpad Options (whether or not then vested or exercisable), minus (b) any shares of Offerpad stock held by Offerpad or any subsidiary thereof issued and outstanding immediately prior to the First Effective Time, minus (c) a number of shares equal to the aggregate exercise price of the Offerpad Options described in clause (ii) above divided by the Per Share Merger Consideration.

Available Closing SPNV Cash” are to an amount equal to (i) all amounts in the trust account, plus (ii) the aggregate amount of cash that has been funded to and remains with SPNV pursuant to the Subscription Agreements as of immediately prior to the Closing, plus (iii) the aggregate amount of cash that has been funded to and remains with SPNV pursuant to the SPNV Forward Purchase Agreement as of immediately prior to the Closing, plus (iv) any other cash then held by SPNV as of immediately prior to the Closing, minus (v) the aggregate amount of payments required to be made by SPNV in connection with stockholder redemptions, minus (vi) all indebtedness for borrowed money of SPNV, minus (vii) all fees, costs and expenses of SPNV incurred prior to and through the Closing Date in connection with the negotiation, preparation and execution of this Agreement, the other Transaction Agreements, the performance and compliance with all Transaction Agreements and conditions contained herein to be performed or complied with by Acquiror at or before Closing, and the consummation of the Transactions, including deferred underwriting discounts or fees and the fees, costs, expenses and disbursements of counsel, accountants, advisors and consultants of SPNV.

business combination” are to, together, (i) the First Merger and (ii) the Second Merger;

Closing” are to the consummation of the business combination;

Closing Date” are to the date on which the Transactions are consummated;

Closing Share Consideration” are to a number of shares of Offerpad Solutions common stock determined by dividing (i) the Equity Value by (ii) $10.00;

Code” are to the Internal Revenue Code of 1986, as amended;

completion window” are to the period following the completion of the SPNV IPO at the end of which, if SPNV has not completed an initial business combination, it will redeem 100% of the public shares at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of permitted withdrawals and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, subject to applicable law and certain conditions. The completion window ends on October 23, 2022, subject to any extension period;

Condition Precedent Proposals” are to the business combination proposal, the charter proposal, the incentive plan proposal, the ESPP proposal and the NYSE proposal, collectively;

COVID-19” are to SARS-CoV-2 or COVID-19, and any evolutions thereof;

COVID-19 Measures” are to any quarantine, “shelter in place,” “stay at home,” workforce reduction, social distancing, shut down, closure, sequester or any other law, governmental order, Action, directive,

 

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pronouncement, guidelines or recommendations by any governmental authority (including the Centers for Disease Control and Prevention and the World Health Organization) in connection with, related to or in response to COVID-19, including, but not limited to, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and the Families First Coronavirus Response Act, or any changes thereto;

current certificate of incorporation” are to SPNV’s second amended and restated certificate of incorporation in effect as of the date of this proxy statement/prospectus;

DGCL” are to the Delaware General Corporation Law, as amended;

Equity Value” are to $2,250,000,000.00;

ESPP” are to the Offerpad Solutions 2021 Employee Stock Purchase Plan, attached to this proxy statement/prospectus as Annex H;

Exchange Act” are to the Securities Exchange Act of 1934, as amended;

Exchange Agent Agreement” are to a paying and exchange agent agreement, in form and substance reasonably acceptable to SPNV and Offerpad;

Exchange Ratio” are to the quotient obtained by dividing the Equity Value by the Aggregate Fully Diluted Company Common Stock;

Excluded Shares” are to shares of Offerpad stock issued and outstanding immediately prior to the First Effective Time that are (a) subject to Offerpad Options, (b) held in Offerpad’s treasury or owned by SPNV, First Merger Sub, Second Merger Sub or Offerpad or any subsidiary thereof immediately prior to the First Effective Time, or (c) held by stockholders of Offerpad who have perfected and not withdrawn a demand for appraisal rights pursuant to the applicable provisions of the DGCL;

First Effective Time” are to the effective time of the First Merger;

First Merger” are to the merger of First Merger Sub with and into Offerpad;

First Merger Sub” are to Orchids Merger Sub, Inc., a Delaware corporation and direct, wholly owned subsidiary of SPNV;

Founder” are to Brian Bair and his affiliates;

founder shares” are to shares of SPNV’s Class B common stock and SPNV’s Class A common stock issued upon the automatic conversion thereof at the time of SPNV’s initial business combination;

HSR Act” are to the Hart-Scott-Rodino Antitrust Improvements Act of 1976;

Merger Agreement” are to that certain Agreement and Plan of Merger, dated as of March 17, 2021, by and among SPNV, First Merger Sub, Second Merger Sub and Offerpad;

Offerpad” are to OfferPad, Inc., a Delaware corporation;

Offerpad common stock” are to the shares of common stock, par value $0.00001 per share, of Offerpad;

Offerpad Holders Support Agreement” are to that certain Support Agreement, dated as of March 17, 2021, by and among SPNV, Offerpad and certain stockholders of Offerpad party thereto, as amended or modified from time to time;

 

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Offerpad Incentive Plan” are to the OfferPad, Inc. 2016 Stock Option and Grant Plan, as amended;

Offerpad Options” are to options to acquire shares of Offerpad common stock granted under the Offerpad Incentive Plan or any other agreement or plan;

Offerpad preferred stock” are to, collectively, the shares of preferred stock, par value $0.00001 per share, of Offerpad, of which shares have been designated as: (a) Series A-1 Preferred Stock, (b) Series A-2 Preferred Stock, (c) Series A Preferred Stock, (d) Series B Preferred Stock and (e) Series C Preferred Stock;

Offerpad Solutions” are to SPNV following the consummation of the Transactions and its name change from Supernova Partners Acquisition Company, Inc. to Offerpad Solutions Inc.;

Offerpad Solutions Class A common stock” are to the shares of Class A common stock, par value $0.0001 per share, of Offerpad Solutions;

Offerpad Solutions Class B common stock” are to the shares of Class B common stock, par value $0.0001 per share, of Offerpad Solutions;

Offerpad Solutions Class C common stock” are to the shares of Class C common stock, par value $0.0001 per share, of Offerpad Solutions;

Offerpad Solutions common stock” are to the Offerpad Solutions Class A common stock and Offerpad Solutions Class B common stock;

Offerpad Solutions Options” are to options to acquire shares of Offerpad Solutions Class A common stock;

Offerpad stock” are to the Offerpad common stock and the Offerpad preferred stock;

“PCAOB Audited Financial Statements” are to the audited consolidated balance sheets of Offerpad and its subsidiaries as of December 31, 2020 and December 31, 2019, and the related audited consolidated statements of operations, cash flows and stockholders’ equity for the years ended December 31, 2020, December 31, 2019, and December 31, 2018, together with the auditor’s report thereon.

Per Share Merger Consideration” are to the product obtained by multiplying (a) the Exchange Ratio by (b) $10.00;

PIPE Investment” are to the private placement pursuant to which SPNV entered into subscription agreements (containing commitments to funding that are subject only to conditions that generally align with the conditions set forth in the Merger Agreement) with certain investors whereby such investors have agreed to purchase an aggregate of 20,000,000 shares of Offerpad Solutions Class A common stock at a purchase price of $10.00 per share for an aggregate purchase price of $200,000,000;

PIPE Investors” are to the investors participating in the PIPE Investment;

private placement warrants” are to SPNV’s warrants issued to the Sponsor in a private placement simultaneously with the closing of the SPNV IPO;

Proposed Bylaws” are to the proposed bylaws of Offerpad Solutions, effective prior to the First Effective Time and the closing of the PIPE Investment attached to this proxy statement/prospectus as Annex C;

Proposed Charter” are to the proposed third restated certificate of incorporation of Offerpad Solutions in the form attached hereto as Annex B;

 

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public shares” are to shares of SPNV’s Class A common stock sold as part of the units in the SPNV IPO (whether they were purchased in the SPNV IPO or thereafter in the open market);

public stockholders” are to the holders of public shares, including the Sponsor and SPNV’s officers and directors to the extent the Sponsor and SPNV’s officers or directors purchase public shares, provided that each of their status as a “public stockholder” shall only exist with respect to such public shares;

public warrants” are to SPNV warrants sold as part of the units in the SPNV IPO (whether they were purchased in the SPNV IPO or thereafter in the open market);

Registration Rights Agreement” are to that certain Amended and Restated Registration Rights Agreement, to be entered into at Closing by Offerpad Solutions, the Sponsor, certain independent directors of SPNV, the parties to the SPNV Forward Purchase Agreement, certain former stockholders of Offerpad and other parties thereto;

SEC” are to the United States Securities and Exchange Commission;

Second Merger” are to the merger of Offerpad with and into Second Merger Sub, with Second Merger Sub surviving as a wholly owned subsidiary of SPNV;

Second Merger Sub” are to Orchids Merger Sub, LLC, a Delaware limited liability company and direct, wholly owned subsidiary of SPNV;

SPNV” are to Supernova Partners Acquisition Company, Inc., a Delaware corporation;

SPNV Forward Purchase” are to the purchase by each of Ancient 1604 LLC and 75 and Sunny LP, affiliates of Alexander M. Klabin and Spencer Rascoff, respectively, the Co-Chairs of SPNV, pursuant to the SPNV Forward Purchase Agreements, of 5,000,000 shares of Offerpad Solutions Class A common stock in the aggregate, plus an aggregate of 1,666,667 warrants to purchase one share of Offerpad Solutions Class A common stock at an exercise price of $11.50 per share, subject to adjustment, for an aggregate purchase price of $50,000,000, or $10.00 for one share of Offerpad Solutions Class A common stock and one-third of one warrant to purchase one share of Offerpad Solutions Class A common stock, in a private placement that will close concurrently with the closing of the business combination;

SPNV Forward Purchase Agreements” are to the forward purchase agreements, entered into as of September 25, 2020, by and between SPNV and Ancient 1604 LLC and 75 and Sunny LP, affiliates of Alexander M. Klabin and Spencer Rascoff, respectively, the Co-Chairs of SPNV;

SPNV Insiders are to, collectively, the Sponsor and the officers and directors of SPNV;

SPNV IPO” are to the initial public offering by SPNV which closed on October 23, 2020;

SPNV Parties” are to SPNV, First Merger Sub and Second Merger Sub;

SPNV Stockholder Redemption” are to the redemption by SPNV’s stockholders of the Class A common stock pursuant to the terms of the Merger Agreement;

SPNV’s Class A common stock” are to, prior to consummation of the Transactions, SPNV’s Class A common stock, par value $0.0001 per share and, following consummation of the Transactions, to the Class A common stock, par value $0.0001 per share, of Offerpad Solutions;

SPNV’s Class B common stock” are to SPNV’s Class B common stock, par value $0.0001 per share;

 

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SPNV’s common stock” are to SPNV’s Class A common stock and SPNV’s Class B common stock;

SPNV warrants” are to the private placement warrants and the public warrants;

Sponsor” are to Supernova Partners LLC, a Delaware limited liability company;

Sponsor Support Agreement” are to that certain Letter Agreement, dated as of March 17, 2021, by and among the Sponsor, the Company, Acquiror and the other parties signatory thereto, as amended, restated, modified or supplemented from time to time;

Subscription Agreements” are to the subscription agreements entered into by and between SPNV and the PIPE Investors, in each case, dated as of March 17, 2021 and entered into in connection with the PIPE Investment;

Sunset Date” are to the earlier of: (a) the date that is nine months following the date on which Founder (x) is no longer providing services, whether upon death, resignation, removal or otherwise, to Offerpad Solutions as a member of the senior leadership team, officer or director and (y) has not provided any such services for the duration of such nine-month period; and (b) the date as of which the Qualified Stockholders have Transferred (as such terms are defined in the Proposed Charter), in the aggregate, more than seventy-five (75%) of the shares of Offerpad Solutions Class B common stock that were held by the Qualified Stockholders immediately following the First Effective Time (as defined in the Merger Agreement);

Transaction Agreements” are to the Merger Agreement, the Registration Rights Agreement, the Offerpad Holders Support Agreement, the Sponsor Support Agreement, the Subscription Agreements, the SPNV Forward Purchase Agreements, the Exchange Agent Agreement, each Letter of Transmittal, the Proposed Charter, the Proposed Bylaws, and all the other agreements, documents, instruments and certificates entered into in connection herewith and/or therewith and any and all exhibits and schedules thereto;

Transactions” are to, collectively, the business combination and the other transactions contemplated by the Merger Agreement;

Treasury Regulations” are to the regulations promulgated under the Code;

trust account” are to the trust account of SPNV that holds the proceeds from the SPNV IPO;

Trust Agreement” are to the Investment Management Trust Agreement, effective as of October 20, 2020, by and between SPNV and Continental Stock Transfer & Trust Company, as trustee;

Warrant Agreement” are to that certain Warrant Agreement, dated as of October 20, 2020, by and between SPNV and Continental Stock Transfer & Trust Company, as warrant agent; and

warrants” are to the public warrants and the private placement warrants.

 

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SUMMARY OF THE MATERIAL TERMS OF THE TRANSACTIONS

This summary term sheet, together with the sections entitled “Questions and Answers About the Proposals” and “Summary of the Proxy Statement/Prospectus,” summarizes certain information contained in this proxy statement/prospectus, but does not contain all of the information that is important to you. You should read carefully this entire proxy statement/prospectus, including the attached Annexes, for a more complete understanding of the matters to be considered at the special meeting. In addition, for definitions used commonly throughout this proxy statement/prospectus, including this summary term sheet, please see the section entitled “Frequently Used Terms.”

 

   

Supernova Partners Acquisition Company, Inc., a Delaware corporation, which we refer to as “SPNV,” “we,” “us,” or “our,” is a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

 

   

On October 23, 2020, SPNV consummated the SPNV IPO of 40,250,000 units, including 5,250,000 units under the underwriters’ over-allotment option, with each unit consisting of one share of SPNV’s Class A common stock and one-third of one warrant, each whole warrant to purchase one share of SPNV’s Class A common stock. The units were sold at an offering price of $10.00 per unit, generating gross proceeds of $402,500,000. Simultaneously with the consummation of the initial public offering, SPNV consummated the private placement of 6,700,000 warrants at a price of $1.50 per warrant, generating total proceeds of $10,050,000. Offering costs amounted to approximately $22.8 million, inclusive of an underwriting discount of approximately $8.1 million and deferred underwriting commissions of approximately $14.1 million.

 

   

Following the consummation of the SPNV IPO, $402,500,000 was deposited into a U.S.-based trust account maintained by Continental Stock Transfer & Trust Company, acting as trustee. Except as described in the prospectus for the SPNV IPO, these proceeds will not be released until the earliest of (a) the completion of an initial business combination, (b) SPNV’s redemption of any public shares properly submitted in connection with a stockholder vote to amend our current certificate of incorporation, as described in the Trust Agreement, and (c) SPNV’s redemption of 100% of the outstanding public shares upon its failure to consummate a business combination within the completion window.

 

   

OfferPad, Inc., a Delaware corporation, which we refer to as “Offerpad,” is a leading iBuyer platform for residential real estate that enables consumers to seamlessly buy and sell their homes using a mobile device. See the sections entitled “Information About Offerpad,” “Offerpad’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Management of Offerpad Following the Business Combination.”

 

   

On March 17, 2021, SPNV entered into an Agreement and Plan of Merger with Offerpad, First Merger Sub and Second Merger Sub that, among other things, provides for (i) First Merger Sub to be merged with and into Offerpad with Offerpad being the surviving company in the First Merger as a wholly owned subsidiary of SPNV and (ii) Offerpad to be merged with and into Second Merger Sub with Second Merger Sub being the surviving company in the Second Merger as a wholly owned subsidiary of SPNV.

 

   

Subject to the terms of the Merger Agreement, the aggregate consideration payable to the pre-closing holders of Offerpad stock and Offerpad Options will be equal to the Closing Share Consideration.

 

   

Pursuant to the PIPE Investment, SPNV has agreed to issue and sell to the PIPE Investors, and the PIPE Investors have agreed to buy from SPNV, 20,000,000 shares of Offerpad Solutions Class A common stock at a purchase price of $10.00 per share for an aggregate purchase price of $200,000,000.

 

   

Pursuant to the SPNV Forward Purchase Agreement, certain affiliates of the Sponsor have agreed to purchase an aggregate of 5,000,000 shares of Offerpad Solutions Class A common stock and an aggregate of 1,666,667 warrants to purchase one share of Offerpad Solutions Class A common stock, for an aggregate purchase price of $50,000,000, or $10.00 per share of Offerpad Solutions Class A common stock and one-third of one warrant to purchase one share of Offerpad Solutions Class A common stock.

 

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It is anticipated that, upon the Closing: (i) existing stockholders of Offerpad will own approximately 74.9% of Offerpad Solutions on a fully diluted net exercise basis; (ii) SPNV’s public stockholders (other than the PIPE Investors) will retain an ownership interest of approximately 13.4% in Offerpad Solutions on a fully diluted net exercise basis; (iii) the PIPE Investors will own approximately 6.7% of Offerpad Solutions on a fully diluted net exercise basis; and (iv) the Sponsor (and its affiliates, including the purchasers pursuant to the SPNV Forward Purchase) will own approximately 5.0% of Offerpad Solutions on a fully diluted net exercise basis. These indicative levels of ownership interest: (i) exclude the impact of the shares of SPNV’s Class A common stock underlying warrants and (ii) assume that no public stockholder exercises redemption rights with respect to its shares for a pro rata portion of the funds in the trust account.

 

   

SPNV management and the SPNV Board considered various factors in determining whether to approve the Merger Agreement and the Transactions. For more information about the reasons that the SPNV Board considered in determining its recommendation, please see the section entitled “Proposal No. 1—The Business Combination Proposal—SPNV’s Board of Directors’ Reasons for Approval of the Transactions.” When you consider the SPNV Board’s recommendation of these proposals, you should keep in mind that our directors and officers have interests in the business combination that are different from, or in addition to, the interests of SPNV stockholders generally. Please see the section entitled “Proposal No. 1—The Business Combination Proposal—Interests of Certain Persons in the Business Combination” for additional information. The SPNV Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Transactions and in recommending to the SPNV stockholders that they vote “FOR” the proposals presented at the special meeting.

 

   

At the special meeting, SPNV’s stockholders will be asked to consider and vote on the following proposals:

 

   

a proposal to approve the business combination described in this proxy statement/prospectus, including (a) adopting the Merger Agreement and (b) approving the other transactions contemplated by the Merger Agreement and related agreements described in this proxy statement/prospectus. Please see the section entitled “Proposal No. 1—The Business Combination Proposal”;

 

   

a proposal to approve and adopt the Proposed Charter in the form attached hereto as Annex B. Please see the section entitled “Proposal No. 2—The Charter Proposal”;

 

   

a proposal to vote upon, on a non-binding advisory basis, certain governance provisions in Proposed Charter, presented separately in accordance with requirements of the SEC. Please see the section entitled “Proposal No. 3—The Governance Proposal;

 

   

a proposal to approve the 2021 Plan. Please see the section entitled “Proposal No. 4— The Incentive Plan Proposal”;

 

   

a proposal to approve the ESPP. Please see the section entitled “Proposal No. 5—The ESPP Proposal”;

 

   

a proposal to approve, for purposes of complying with the applicable provisions of NYSE Listing Rule 312, the issuance of more than 20% of SPNV’s issued and outstanding shares of common stock and the issuance of shares of Class A common stock and warrants to related parties of SPNV, in each case in connection with the business combination. Please see the section entitled “Proposal No. 6—The NYSE Proposal”; and

 

   

a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the business combination proposal, the charter proposal, the governance proposal, the incentive plan proposal, the ESPP proposal or the NYSE proposal. Please see the section entitled “Proposal No. 7—The Adjournment Proposal.”

 

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QUESTIONS AND ANSWERS ABOUT THE PROPOSALS

The questions and answers below highlight only selected information from this proxy statement/prospectus and only briefly address some commonly asked questions about the special meeting and the proposals to be presented at the special meeting, including with respect to the proposed business combination. The following questions and answers do not include all the information that is important to SPNV stockholders. Stockholders are urged to read carefully this entire proxy statement/prospectus, including the Annexes and the other documents referred to herein, to fully understand the proposed business combination and the voting procedures for the special meeting.

 

Q.

Why am I receiving this proxy statement/prospectus?

 

A.

SPNV and Offerpad have agreed to a business combination under the terms of the Merger Agreement that is described in this proxy statement/prospectus. A copy of the Merger Agreement is attached to this proxy statement/prospectus as Annex A, and SPNV encourages its stockholders to read it in its entirety. SPNV’s stockholders are being asked to consider and vote upon, among other matters, a proposal to adopt the Merger Agreement and approve the Transactions, which, among other things, include provisions for (a) First Merger Sub to be merged with and into Offerpad with Offerpad being the surviving corporation in the First Merger as a wholly owned subsidiary of SPNV and (b) immediately following the First Merger and as part of the same overall transaction as the First Merger, Offerpad to be merged with and into Second Merger Sub, with Second Merger Sub surviving as a wholly owned subsidiary of SPNV in the Second Merger. In connection with the Closing, SPNV will change its name to “Offerpad Solutions Inc.” Please see the section entitled “Proposal No. 1—The Business Combination Proposal.”

This proxy statement/prospectus and its Annexes contain important information about the proposed business combination and the other matters to be acted upon at the special meeting. You should read this proxy statement/prospectus and its Annexes carefully and in their entirety.

Your vote is important. You are encouraged to submit your proxy as soon as possible after carefully reviewing this proxy statement/prospectus and its Annexes.

 

Q.

When and where is the Special Meeting?

 

A.

The special meeting will be held via live webcast on                 , 2021 at                  Eastern Time. The special meeting can be accessed by visiting                 , where you will be able to listen to the meeting live and vote during the meeting. Please note that you will only be able to access the special meeting by means of remote communication.

 

Q.

What are the proposals on which I am being asked to vote at the special meeting?

 

A.

The stockholders of SPNV will be asked to consider and vote on the following proposals at the special meeting:

 

  1.

a proposal to approve the business combination described in this proxy statement/prospectus, including (a) adopting the Merger Agreement and (b) approving the other transactions contemplated by the Merger Agreement and related agreements described in this proxy statement/prospectus. Please see the section entitled “Proposal No. 1—The Business Combination Proposal”;

 

  2.

a proposal to approve and adopt the Proposed Charter in the form attached hereto as Annex B. Please see the section entitled “Proposal No. 2—The Charter Proposal”;

 

  3.

a proposal to vote upon, on a non-binding advisory basis, certain governance provisions in the Proposed Charter, presented separately, in accordance with the requirements of the SEC. Please see the section entitled “Proposal No. 3—The Governance Proposal”;

 

  4.

a proposal to approve the 2021 Plan. Please see the section entitled “Proposal No. 4—The Incentive Plan Proposal”;

 

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  5.

a proposal to approve the ESPP. Please see the section entitled “Proposal No. 5—The ESPP Proposal”;

 

  6.

a proposal to approve, for purposes of complying with the applicable provisions of NYSE Listing Rule 312, the issuance of more than 20% of SPNV’s issued and outstanding shares of common stock and the issuance of shares of Class A common stock and warrants to related parties of SPNV, in each case in connection with the business combination. Please see the section entitled “Proposal No. 6—The NYSE Proposal”; and

 

  7.

a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the business combination proposal, the charter proposal, the governance proposal, the incentive plan proposal, the ESPP proposal or the NYSE proposal. Please see the section entitled “Proposal No. 7—The Adjournment Proposal.”

Each of the business combination proposal, the charter proposal, the incentive plan proposal, the ESPP proposal and the NYSE proposal (each a “Condition Precedent Proposal” and collectively, the “Condition Precedent Proposals”) is cross-conditioned on the approval of each other. Each of the governance proposal and the adjournment proposal is not conditioned upon the approval of any other proposal set forth in this proxy statement/prospectus.

SPNV will hold the special meeting of its stockholders to consider and vote upon these proposals. This proxy statement/prospectus contains important information about the proposed business combination and the other matters to be acted upon at the special meeting. Stockholders should read it carefully.

Consummation of the Transactions is conditioned on the approval of each of the Condition Precedent Proposals. If any of the Condition Precedent Proposals are not approved, we will not consummate the Transactions.

The vote of stockholders is important. Stockholders are encouraged to vote as soon as possible after carefully reviewing this proxy statement/prospectus.

 

Q.

Why is SPNV proposing the business combination?

 

A.

SPNV was organized to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses or entities.

On October 23, 2020, SPNV consummated the SPNV IPO of 40,250,000 units, including 5,250,000 units under the underwriters’ over-allotment option, with each unit consisting of one share of SPNV’s Class A common stock and one-third of one warrant, with each whole warrant being exercisable to purchase one share of SPNV’s Class A common stock. The units were sold at an offering price of $10.00 per unit, generating gross proceeds of $402,500,000. Simultaneously with the consummation of the SPNV IPO, SPNV consummated the private placement of 6,700,000 warrants at a price of $1.50 per warrant, generating total proceeds of $10,050,000. Offering costs amounted to approximately $22.8 million, inclusive of an underwriting discount of approximately $8.1 million and deferred underwriting commissions of approximately $14.1 million. Since the SPNV IPO, SPNV’s activity has been limited to the evaluation of business combination candidates.

Offerpad is a leading iBuyer platform for residential real estate that enables consumers to seamlessly buy and sell their homes using a mobile device. Offerpad is known in the homebuilding industry as a total-solution provider, offering new-construction homebuilders a full suite of products and services through its exclusive Real Estate Solutions Center. Offerpad partners with select, top-tier homebuilders in all markets where it operates to provide these added benefits to home-builder sellers. Through its strategic alliance program, Offerpad helps builders close on more sales while making it easier for customers to confidently commit to their new-construction home.

The SPNV Board considered the results of the due diligence review of Offerpad’s business. The SPNV Board also considered Offerpad’s current prospects for growth. For additional information, see “Proposal

 

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No. 1—The Business Combination Proposal—SPNV’s Board of Directors’ Reasons for Approval of the Transactions.”

As a result, SPNV believes that a business combination with Offerpad will provide SPNV stockholders with an opportunity to participate in the ownership of a company with significant growth potential. Please see the section entitled “Proposal No. 1—The Business Combination Proposal—SPNV’s Board of Directors’ Reasons for Approval of the Transactions.” Although the SPNV Board believes that the business combination presents a unique business combination opportunity and is in the best interests of SPNV stockholders, the SPNV Board did consider certain potentially material negative factors in arriving at that conclusion. Please see the section entitled “Risk Factors—Risks Related to Offerpad’s Business and Operations Following the Business Combination.”

 

Q.

Why is SPNV providing stockholders with the opportunity to vote on the business combination?

 

A.

Under our current certificate of incorporation, we must provide all public stockholders with the opportunity to have their public shares redeemed upon the consummation of our initial business combination either in conjunction with a tender offer or in conjunction with a stockholder vote. For business and other reasons, we have elected to provide our stockholders with the opportunity to have their public shares redeemed in connection with a stockholder vote rather than a tender offer. Therefore, we are seeking to obtain the approval of our stockholders of the business combination proposal in order to allow our public stockholders to effectuate redemptions of their public shares in connection with the closing of the business combination.

 

Q.

What will happen in the business combination?

 

A.

Pursuant to the Merger Agreement, and upon the terms and subject to the conditions set forth therein, SPNV will acquire Offerpad in a series of transactions we collectively refer to as the business combination. At the Closing, among other things, (i) First Merger Sub will merge with and into Offerpad with Offerpad being the surviving corporation in the First Merger as a wholly owned subsidiary of SPNV and (ii) immediately following the First Merger and as part of the same overall transaction as the First Merger, Offerpad will be merged with and into Second Merger Sub, with Second Merger Sub surviving as a wholly owned subsidiary of SPNV in the Second Merger. In connection with the Closing, SPNV will change its name to “Offerpad Solutions Inc.” Following the Closing, SPNV will own 100% of the limited liability company interests of Second Merger Sub and each share of Offerpad stock will have been cancelled and converted into the right to receive a portion of the Closing Share Consideration.

 

Q.

Following the business combination, will SPNV’s securities continue to trade on a stock exchange?

 

A.

Yes. We intend to apply for listing, effective at the time of the Closing, of Offerpad Solutions Class A common stock and Offerpad Solutions warrants on the NYSE under the symbols “OPAD” and “OPADWS”, respectively. Our publicly traded units will separate into the component securities following the Closing and will no longer trade as a separate security.

 

Q.

How will the business combination impact the shares of SPNV outstanding after the business combination?

 

A.

As a result of the business combination and the consummation of the transactions contemplated by the Merger Agreement and the related agreements, including, without limitation, the PIPE Investment and the SPNV Forward Purchase, the amount of SPNV’s Class A common stock outstanding will increase by approximately 547% to approximately 260,489,157 shares of Offerpad Solutions common stock (assuming that no shares of SPNV’s Class A common stock are elected to be redeemed by SPNV stockholders). Additional shares of Offerpad Solutions common stock may be issuable in the future as a result of the issuance of additional shares that are not currently outstanding, including issuance of shares of

 

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  Offerpad Solutions common stock upon exercise of the warrants after the business combination. The issuance and sale of such shares in the public market could adversely impact the market price of Offerpad Solutions Class A common stock, even if its business is doing well. Pursuant to the 2021 Plan, a copy of which is attached to this proxy statement/prospectus as Annex G, following the Closing, SPNV may grant an aggregate amount of up to 32,197,762 additional shares of Offerpad Solutions Class A common stock. Pursuant to the ESPP, a copy of which is attached to this proxy statement/prospectus as Annex H, following the closing of the business combination, SPNV may grant an aggregate amount of up to 3,219,776 additional shares of Offerpad Solutions Class A common stock.

 

Q.

Will the management of Offerpad change in the business combination?

 

A.

We anticipate that all of the executive officers of Offerpad will remain with Offerpad Solutions. In addition, certain individuals have each been nominated to serve as directors of Offerpad Solutions following completion of the business combination. Please see the section entitled “Management of Offerpad Solutions Following the Business Combination” for additional information.

 

Q.

What equity stake will current stockholders of Offerpad and the PIPE Investors hold in Offerpad Solutions after the closing?

It is anticipated that, upon the Closing: (i) existing stockholders of Offerpad will own approximately 74.9% of Offerpad Solutions on a fully diluted net exercise basis; (ii) SPNV’s public stockholders (other than the PIPE Investors) will retain an ownership interest of approximately 13.4% in Offerpad Solutions on a fully diluted net exercise basis; (iii) the PIPE Investors will own approximately 6.7% of Offerpad Solutions on a fully diluted net exercise basis; and (iv) the Sponsor (and its affiliates, including the purchasers pursuant to the SPNV Forward Purchase) will own approximately 5.0% of Offerpad Solutions on a fully diluted net exercise basis. These indicative levels of ownership interest: (i) exclude the impact of the shares of SPNV’s Class A common stock underlying warrants and (ii) assume that no SPNV public stockholder exercises redemption rights with respect to its shares for a pro rata portion of the funds in the trust account.

For more information, please see the sections entitled “Summary of the Proxy Statement/Prospectus—Impact of the Business Combination on Offerpad Solutions’ Public Float,” “Unaudited Pro Forma Condensed Combined Financial Information,” “Proposal No. 4—The Incentive Plan Proposal” and “Proposal No. 5—the ESPP Proposal.”

 

Q.

Will SPNV obtain new financing in connection with the Transactions?

 

A.

Yes. SPNV has entered into subscription agreements (containing commitments to funding that are subject to conditions that generally align with the conditions set forth in the Merger Agreement) with the PIPE Investors, pursuant to which SPNV has agreed to issue and sell to the PIPE Investors and the PIPE Investors have agreed to buy from SPNV 20,000,000 shares of Offerpad Solutions Class A common stock at a purchase price of $10.00 per share for an aggregate commitment of $200,000,000. In addition, pursuant to the SPNV Forward Purchase Agreements, certain affiliates of the Sponsor have agreed to purchase an aggregate of 5,000,000 shares of Offerpad Solutions Class A common stock and an aggregate of 1,666,667 warrants to purchase one share of Offerpad Solutions Class A common stock, for an aggregate purchase price of $50,000,000, or $10.00 per share of Offerpad Solutions Class A common stock and one-third of one warrant to purchase one share of Offerpad Solutions Class A common stock. Please see the section entitled “Proposal No. 1—The Business Combination Proposal— Sources and Uses for the Business Combination.”

 

Q.

What conditions must be satisfied to complete the Business Combination?

 

A.

There are a number of closing conditions in the Merger Agreement, including the approval by the stockholders of SPNV of the Condition Precedent Proposals.

 

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For a summary of the conditions that must be satisfied or waived prior to completion of the business combination, please see the section entitled “Proposal No. 1—The Business Combination Proposal—Certain Agreements Related to the Business Combination—Merger Agreement.”

 

Q.

What happens if I sell my shares of SPNV’s Class A common stock before the special meeting?

 

A.

The record date for the special meeting is earlier than the date that the business combination is expected to be completed. If you transfer your shares of SPNV’s Class A common stock after the record date, but before the special meeting, unless the transferee obtains from you a proxy to vote those shares, you will retain your right to vote at the special meeting. However, you will not be able to seek redemption of your shares of SPNV’s Class A common stock because you will no longer be able to deliver them for cancellation upon the Closing. If you transfer your shares of SPNV’s Class A common stock prior to the record date, you will have no right to vote those shares at the special meeting or redeem those shares for a pro rata portion of the proceeds held in the trust account.

 

Q.

What constitutes a quorum at the special meeting?

 

A.

A majority of the voting power of all issued and outstanding shares of SPNV’s common stock entitled to vote as of the record date at the special meeting must be present via the virtual meeting platform, or represented by proxy, at the special meeting to constitute a quorum and in order to conduct business at the special meeting. Abstentions will be counted as present for the purpose of determining a quorum. As of the record date for the special meeting, 25,156,251 shares of SPNV’s common stock would be required to be present at the special meeting to achieve a quorum.

 

Q.

What vote is required to approve the proposals presented at the special meeting?

 

A.

The approval of each of the business combination proposal, the governance proposal (which is a non-binding advisory vote), the incentive plan proposal, the ESPP proposal, the NYSE proposal and the adjournment proposal require the affirmative vote of the holders of a majority of the shares of SPNV’s common stock that are present and entitled to vote at the special meeting. Accordingly, if a valid quorum is established, a SPNV stockholder’s failure to vote by proxy or to vote at the special meeting with regard to the business combination proposal, the governance proposal, the incentive plan proposal, the ESPP proposal, the NYSE proposal and the adjournment proposal will have no effect on such proposals.

The approval of the charter proposal requires the affirmative vote of the holders of a majority of the outstanding shares of SPNV’s common stock entitled to vote thereon at the special meeting, which majority shall include the affirmative vote or written consent of the holders of a majority of the shares of SPNV’s Class B common stock then outstanding, voting separately as a class. Accordingly, if a valid quorum is established, an SPNV stockholder’s failure to vote by proxy or to vote at the special meeting with regard to the charter proposal will have the same effect as a vote “against” such proposal.

 

Q.

How many votes do I have at the special meeting?

 

A.

Our stockholders are entitled to one vote on each proposal presented at the special meeting for each share of SPNV’s common stock held of record as of June 21, 2021, the record date for the special meeting. As of the close of business on the record date, there were 50,312,500 outstanding shares of SPNV’s common stock.

 

Q.

Why is SPNV proposing the governance proposal?

 

A.

As required by applicable SEC guidance, SPNV is requesting that its stockholders vote upon, on a non-binding advisory basis, a proposal to approve certain governance provisions contained in the Proposed Charter that materially affect stockholder rights. This separate vote is not otherwise required by Delaware

 

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  law separate and apart from the charter proposal, but pursuant to SEC guidance, SPNV is required to submit these provisions to its stockholders separately for approval. However, the stockholder vote regarding this proposal is an advisory vote, and is not binding on SPNV and the SPNV Board (separate and apart from the approval of the charter proposal). Furthermore, the business combination is not conditioned on the separate approval of the governance proposal (separate and apart from approval of the charter proposal). Please see the section entitled “Proposal No. 3—The Governance Proposal.”

 

Q.

Did the SPNV Board obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the business combination?

 

A.

The SPNV Board did not obtain a third-party valuation or fairness opinion in connection with its determination to approve the business combination. The officers and directors of SPNV have substantial experience in evaluating the operating and financial merits of companies from a wide range of industries, including real estate and property technology, and concluded that their experience and backgrounds, together with the experience and sector expertise of SPNV’s financial and other advisors, including Jefferies LLC (“Jefferies”), enabled them to perform the necessary analyses and make determinations regarding the Transactions. In addition, SPNV’s officers and directors and SPNV’s advisors have substantial experience with mergers and acquisitions. Accordingly, investors will be relying solely on the judgment of the SPNV Board in valuing Offerpad’s business, and assuming the risk that the SPNV Board may not have properly valued such business.

 

Q.

Do I have redemption rights?

 

A.

If you are a public stockholder, you have the right to demand that SPNV redeem such shares for a pro rata portion of the cash held in the trust account. SPNV sometimes refers to these rights to demand redemption of the public shares as “redemption rights.”

Notwithstanding the foregoing, a public stockholder, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from seeking redemption with respect to more than 15% of the public shares. Accordingly, all public shares in excess of 15% held by a public stockholder, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group,” will not be redeemed.

Under SPNV’s current certificate of incorporation, the business combination may be consummated only if SPNV has at least $5,000,001 of net tangible assets after giving effect to all public stockholders that properly demand redemption of their shares for cash.

 

Q.

How do I exercise my redemption rights?

 

A.

If you are a public stockholder and wish to exercise your redemption rights, you must demand that SPNV redeem your shares into cash no later than the second business day preceding the vote on the business combination proposal by delivering your stock to SPNV’s transfer agent physically or electronically using Depository Trust Company’s DWAC (Deposit and Withdrawal at Custodian) system prior to the vote at the special meeting. Any public stockholder will be entitled to demand that such holder’s shares be redeemed for a pro rata portion of the amount then in the trust account (which, for illustrative purposes, was approximately $402,686,198 or $10.00 per share as of June 21, 2021, the record date for the special meeting). Such amount, less any owed but unpaid taxes on the funds in the trust account, will be paid promptly upon the Closing. However, under Delaware law, the proceeds held in the trust account could be subject to claims which could take priority over those of SPNV’s public stockholders exercising redemption rights. Therefore, the per-share distribution from the trust account in such a situation may be less than originally anticipated due to such claims. Your vote on any proposal will have no impact on the amount you will receive upon exercise of your redemption rights.

 

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Any request for redemption, once made by a public stockholder, may be withdrawn at any time up to the time the vote is taken with respect to the business combination proposal at the special meeting. If you deliver your shares for redemption to SPNV’s transfer agent and later decide prior to the special meeting not to elect redemption, you may request that SPNV’s transfer agent return the shares (physically or electronically). You may make such request by contacting SPNV’s transfer agent at the address listed at the end of this section.

Any corrected or changed proxy card or written demand of redemption rights must be received by SPNV’s transfer agent prior to the vote taken on the business combination proposal at the special meeting. No demand for redemption will be honored unless the holder’s stock has been delivered (either physically or electronically) to the transfer agent prior to the vote at the special meeting.

If a demand to exercise redemption rights is properly made as described above, then, if the business combination is consummated, SPNV will redeem these shares for a pro rata portion of funds deposited in the trust account. If you exercise your redemption rights, then you will be exchanging your shares of SPNV’s common stock for cash.

 

Q.

Do I have appraisal rights if I object to the proposed business combination?

 

A.

No. Neither SPNV stockholders nor its unit or warrant holders have appraisal rights in connection with the business combination under the DGCL. Please see the section entitled “Special Meeting of SPNV Stockholders—Appraisal Rights.

 

Q.

What happens to the funds deposited in the trust account after the Closing?

 

A.

The net proceeds of the SPNV IPO, a total of $402,500,000, were placed in the trust account immediately following the SPNV IPO. Following the Closing, the funds in the trust account will be used to pay public stockholders who exercise redemption rights and to pay fees and expenses incurred in connection with the business combination (including aggregate fees of up to approximately $14.1 million as deferred underwriting commissions).

Please see the section entitled “Proposal No. 1—The Business Combination—Sources and Uses for the Business Combination.”

 

Q.

What happens if a substantial number of public stockholders vote in favor of the business combination proposal and exercise their redemption rights?

 

A.

SPNV’s public stockholders may vote in favor of the business combination and still exercise their redemption rights. Accordingly, the business combination may be consummated even though the funds available from the trust account and the number of public stockholders are substantially reduced as a result of redemptions by public stockholders.

 

Q.

What happens if the business combination is not consummated?

 

A.

If SPNV does not complete the business combination for any reason, SPNV would search for another target business with which to complete a business combination. If SPNV does not complete a business combination with Offerpad or another target business by October 23, 2022, subject to any extension period, SPNV must redeem 100% of the outstanding public shares, at a per-share price, payable in cash, equal to the amount then held in the trust account, including interest earned (net of permitted withdrawals and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares. The SPNV Insiders have no redemption rights with respect to their founder shares in the event a business combination is not effected in the completion window, and, accordingly, their founder shares will be worthless. Additionally, in the event of such liquidation, there will be no distribution with respect to SPNV’s outstanding warrants. Accordingly, the warrants will be worthless.

 

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Q.

How does the Sponsor intend to vote on the proposals?

 

A.

The Sponsor and the other SPNV Insiders own of record and are entitled to vote an aggregate of 20% of the outstanding shares of SPNV’s common stock as of the record date. The SPNV Insiders have agreed to vote any founder shares and any public shares held by them as of the record date in favor of the Transactions. The SPNV Insiders may have interests in the business combination that may conflict with your interests as a stockholder. See the sections entitled “Summary of the Proxy Statement/Prospectus—Interests of Certain Persons in the Business Combination” and “Proposal No. 1—The Business Combination Proposal—Interests of Certain Persons in the Business Combination.

 

Q.

When do you expect the business combination to be completed?

 

A.

It is currently anticipated that the business combination will be consummated promptly following the SPNV special meeting which is set for                 , 2021, subject to the satisfaction of customary closing conditions; however, such meeting could be adjourned, as described above. For a description of the conditions to the completion of the business combination, please see the section entitled “Proposal No. 1—The Business Combination Proposal—The Merger Agreement—Conditions to the Closing of the Transactions.

 

Q.

What do I need to do now?

 

A.

SPNV urges you to read carefully and consider the information contained in this proxy statement/prospectus, including the Annexes, and to consider how the business combination will affect you as a stockholder and/or warrant holder of SPNV. Stockholders should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus and on the enclosed proxy card, or, if you hold your shares through a brokerage firm, bank or other nominee, on the voting instruction form provided by the broker, bank or other nominee.

 

Q.

How do I vote?

 

A.

The special meeting will be held via live webcast at                 Eastern Time, on                 , 2021. The special meeting can be accessed by visiting     , where you will be able to listen to the meeting live and vote during the meeting. Please note that you will only be able to access the special meeting by means of remote communication.

If you are a holder of record of SPNV’s common stock on June 21, 2021, the record date for the special meeting, you may vote at the special meeting via the virtual meeting platform or by submitting a proxy for the special meeting. You may submit your proxy by completing, signing, dating and returning the enclosed proxy card in the accompanying pre-addressed postage paid envelope. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or nominee, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the broker, bank or nominee with instructions on how to vote your shares or, if you wish to attend the meeting and vote, obtain a proxy from your broker, bank or nominee.

 

Q.

If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?

 

A.

No. Under the rules of various national and regional securities exchanges, your broker, bank or nominee cannot vote your shares with respect to non-routine matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank or nominee. We believe the proposals presented to the stockholders at the special meeting will be considered non-routine and, therefore, your broker, bank or nominee cannot vote your shares without your instruction on any of the proposals presented at the special meeting. If you do not provide instructions with your proxy, your broker, bank or other nominee may deliver a proxy card expressly indicating that it is NOT voting your

 

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  shares; this indication that a broker, bank or nominee is not voting your shares is referred to as a “broker non-vote.” Broker non-votes will not be counted for the purposes of determining the existence of a quorum or for purposes of determining the number of votes cast at the special meeting. Your bank, broker or other nominee can vote your shares only if you provide instructions on how to vote. You should instruct your broker to vote your shares in accordance with directions you provide.

 

Q.

How will a broker non-vote impact the results of each proposal?

 

A.

Broker non-votes will count as a vote “AGAINST” the charter proposal but will not have any effect on the outcome of any other proposals.

 

Q.

May I change my vote after I have mailed my signed proxy card?

 

A.

Yes. Stockholders of record may send a later-dated, signed proxy card to SPNV’s transfer agent at the address set forth at the end of this section so that it is received prior to the vote at the special meeting or attend the special meeting and vote. Stockholders also may revoke their proxy by sending a notice of revocation to SPNV’s transfer agent, which must be received prior to the vote at the special meeting.

 

Q.

What happens if I fail to take any action with respect to the special meeting?

 

A.

If you fail to take any action with respect to the special meeting and the business combination is approved by stockholders, the business combination will be consummated in accordance with the terms of the Merger Agreement. If you fail to take any action with respect to the special meeting and the business combination is not approved, we will not consummate the business combination.

 

Q.

What will happen if I sign and return my proxy card without indicating how I wish to vote?

 

A.

Signed and dated proxies received by us without an indication of how the stockholder intends to vote on a proposal will be voted “FOR” each proposal presented to the stockholders. The proxyholders may use their discretion to vote on any other matters which properly come before the special meeting.

 

Q.

What should I do if I receive more than one set of voting materials?

 

A.

Stockholders may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast a vote with respect to all of your shares of SPNV’s common stock.

 

Q.

Who can help answer my questions?

 

A.

If you have questions about the Transactions or if you need additional copies of the proxy statement/prospectus or the enclosed proxy card you should contact:

Supernova Partners Acquisition Company, Inc.

4301 50th Street NW

Suite 300, PMB 1044

Washington, DC 20016

Tel: (202) 918-7050

 

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To obtain timely delivery, our stockholders must request any additional materials no later than five business days prior to the special meeting. You may also obtain additional information about SPNV from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information.” If you are a public stockholder and you intend to seek redemption of your public shares, you will need to deliver your stock (either physically or electronically) to SPNV’s transfer agent at the address below prior to the vote at the special meeting. See the section entitled “Proposal No. 1—The Business Combination Proposal—Redemption Rights.”

If you have questions regarding the certification of your position or delivery of your stock, please contact:

Continental Stock Transfer & Trust Company

1 State Street 30th Floor

New York, New York 10004

(212) 509-4000

 

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SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

This summary highlights selected information from this proxy statement/prospectus and does not contain all of the information that is important to you. To better understand the proposals to be submitted for a vote at the special meeting, including the business combination proposal, you should read this entire document carefully, including the Merger Agreement attached as Annex A to this proxy statement/prospectus. The Merger Agreement is the legal document that governs the Transactions that will be undertaken in connection with the business combination. It is also described in detail in this proxy statement/prospectus in the section entitled “Proposal No. 1—The Business Combination Proposal—Certain Agreements Related to the Business Combination—Merger Agreement.”

The Parties

SPNV

Supernova Partners Acquisition Company, Inc. is a blank check company formed in order to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses or entities. SPNV was incorporated under the laws of Delaware on August 31, 2020.

On October 23, 2020, SPNV consummated the SPNV IPO of 40,250,000 units, including 5,250,000 units under the underwriters’ over-allotment option, with each unit consisting of one share of SPNV’s Class A common stock and one-third of one warrant, each whole warrant to purchase one share of SPNV’s Class A common stock at a purchase price of $11.50 per share, subject to adjustment as provided in SPNV’s final prospectus filed with the Securities and Exchange Commission on October 22, 2020 (File No. 333-249053). The units were sold at an offering price of $10.00 per unit, generating gross proceeds of $402,500,000.

Simultaneously with the consummation of the SPNV IPO and the exercise of the underwriters’ over-allotment option, SPNV consummated the private placement of 6,700,000 warrants at a price of $1.50 per warrant, generating total proceeds of $10,050,000. A total of $402,500,000, was deposited into the trust account and the remaining net proceeds became available to be used as working capital to provide for business, legal and accounting due diligence on prospective business combinations and continuing general and administrative expenses. The SPNV IPO was conducted pursuant to a registration statement on Form S-1 that became effective on October 20, 2020. As of June 21, 2021, the record date for the special meeting, there was approximately $402,686,198 held in the trust account.

SPNV’s units, SPNV’s Class A common stock and SPNV’s warrants are listed on the NYSE under the symbols “SPNV.U”, “SPNV” and “SPNV WS”, respectively.

The mailing address of SPNV’s principal executive office is 4301 50th Street NW, Suite 300, PMB 1044, Washington, DC 20016. Its telephone number is (202) 918-7050. After the Closing, its principal executive office will be that of Offerpad.

Orchids Merger Sub, Inc.

Orchids Merger Sub, Inc. (“First Merger Sub”) is a wholly owned subsidiary of SPNV formed solely for the purpose of effectuating the First Merger described herein. First Merger Sub was incorporated under the laws of Delaware as a corporation on March 15, 2021. First Merger Sub owns no material assets and does not operate any business.

The mailing address of First Merger Sub’s principal executive office is 4301 50th Street NW, Suite 300, PMB 1044, Washington, DC 20016. Its telephone number is (202) 918-7050. After the Closing, First Merger Sub will cease to exist as a separate legal entity.


 

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Orchids Merger Sub, LLC

Orchids Merger Sub, LLC (“Second Merger Sub”) is a wholly owned subsidiary of SPNV formed solely for the purpose of effectuating the Second Merger described herein. Second Merer Sub was formed under the laws of Delaware as a limited liability company on March 15, 2021. Second Merger Sub owns no material assets and does not operate any business.

The mailing address of Second Merger Sub’s principal executive office is 4301 50th Street NW, Suite 300, PMB 1044, Washington, DC 20016. Its telephone number is (202) 918-7050. After the Closing, Second Merger Sub will continue as a wholly owned subsidiary of SPNV and successor to Offerpad.

Offerpad

Offerpad is a Delaware corporation incorporated on June 24, 2016. Offerpad’s principal executive office is located at 2150 E German Rd, Suite 1, Chandler, AZ 85286. Its telephone number is (844) 388-4539.

Emerging Growth Company

SPNV 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”). As such, it is eligible to 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 auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in their periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. If some investors find SPNV’s securities less attractive as a result, there may be a less active trading market for SPNV’s securities and the prices of its securities may be more volatile. Following the consummation of the business combination, Offerpad Solutions will also be an “emerging growth company”.

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. SPNV 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, SPNV, 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 SPNV’s financial statements with certain other public companies difficult or impossible because of the potential differences in accounting standards used.

SPNV, or Offerpad Solutions following the consummation of the business combination, will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of the SPNV IPO, (b) in which SPNV or Offerpad Solutions has total annual gross revenue of at least $1.07 billion, or (c) in which SPNV or Offerpad Solutions is deemed to be a large accelerated filer, which means the market value of SPNV’s or Offerpad Solutions’ common equity that is held by non-affiliates exceeds $700 million as of the end of the prior fiscal year’s second fiscal quarter; and (2) the date on which SPNV or Offerpad Solutions has issued more than $1.00 billion in non-convertible debt during the prior three-year period. References herein to “emerging growth company” shall have the meaning associated with it in the JOBS Act.


 

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The Business Combination Proposal

Structure of the Transactions

Pursuant to the Merger Agreement, a business combination between SPNV and Offerpad will be effected through the First Merger, whereby First Merger Sub will merge with and into Offerpad with Offerpad surviving such merger, followed by the Second Merger, whereby, immediately following the First Merger and as part of the same overall transaction as the First Merger, Offerpad will merge with and into Second Merger Sub, with Second Merger Sub surviving such merger as a wholly owned subsidiary of SPNV.

Closing Share Consideration

The aggregate consideration to be paid to the pre-closing holders of Offerpad stock and Offerpad Options will be equal to the Closing Share Consideration. For more information regarding the sources and uses of the funds utilized to consummate the Transactions, please see the section entitled “Proposal No. 1—The Business Combination Proposal—Sources and Uses for the Business Combination.”

Related Agreements

Registration Rights Agreement

The Merger Agreement contemplates that, at the Closing, Offerpad Solutions, the Sponsor, certain independent directors of SPNV, the parties to the SPNV Forward Purchase Agreements and certain former stockholders of Offerpad (the “Offerpad Holders”) and other parties thereto will enter into the Registration Rights Agreement, a copy of which is attached to the accompanying proxy statement/prospectus as Annex D, pursuant to which Offerpad Solutions will agree to register for resale, pursuant to Rule 415 under the Securities Act, certain shares of Offerpad Solutions Class A common stock and other equity securities of Offerpad Solutions that are held by the parties thereto from time to time.

Offerpad Holders Support Agreement

In connection with the execution of the Merger Agreement, SPNV, Offerpad and certain stockholders of Offerpad (the “Requisite Offerpad Stockholders”) entered into the Offerpad Holders Support Agreement, a copy of which is attached as Annex E to this proxy statement/prospectus. Pursuant to the terms of the Offerpad Holders Support Agreement, the Requisite Offerpad Stockholders agreed to, among other things, (i) vote to adopt and approve the Merger Agreement and the Transactions as soon as reasonably practicable after the registration statement which this proxy statement/prospectus forms a part of is declared effective, and in any event within forty-eight hours thereafter, in each case, subject to the terms and conditions of the Offerpad Holders Support Agreement, and (ii) take, or cause to be taken, all actions, and cooperate with other parties, to exercise the drag-along rights pursuant to and in accordance with that certain Fourth Amended and Restated Voting Agreement, dated as of April 16, 2020, by and among Offerpad and the Stockholders (as defined therein).

Each of the Requisite Offerpad Stockholders acknowledged and agreed to be bound by the transfer restrictions on its lock-up shares (i) during the period prior to Closing, and (ii) during the period of 180 days after the Closing Date, in each case, subject to limited exceptions as set forth in the Proposed Bylaws, including (x) with respect to 33% of the Lock-Up Shares if the closing price of SPNV’s Class A common stock equals or exceeds $12.50 per share for any 20 trading days within any 30-trading day period commencing at least 30 days following the Closing and (y) with respect to an additional 50% of the Lock-Up Shares if the closing price of SPNV’s Class A common stock equals or exceeds $15.00 per share for any 20 trading days within any 30-trading day period commencing at least 30 days following the Closing.


 

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The Offerpad Holders Support Agreement will terminate upon the termination of the Merger Agreement if the Closing does not occur.

Sponsor Support Agreement

In connection with the execution of the Merger Agreement, SPNV, the Sponsor, the SPNV Insiders and Offerpad entered into the Sponsor Support Agreement, a copy of which is attached as Annex I to this proxy statement/prospectus. Pursuant to the terms of the Sponsor Support Agreement, the SPNV Insiders agreed to, among other things, vote to adopt and approve the Merger Agreement and the Transactions, in each case, subject to the terms and conditions of the Sponsor Support Agreement. The Sponsor and each independent officer and director of SPNV has entered into a letter agreement with SPNV in connection with the SPNV IPO, pursuant to which they agreed to vote any shares of SPNV capital stock held by them in favor of the Transactions. The Sponsor and each of the SPNV Insiders also agreed to not transfer any lock-up shares (i) during the period prior to Closing, and (ii) during the period of 180 days after the Closing Date, in each case, subject to limited exceptions including (x) with respect to 33% of the Lock-Up Shares if the closing price of SPNV’s Class A common stock equals or exceeds $12.50 per share for any 20 trading days within any 30-trading day period commencing at least 30 days following the Closing and (y) with respect to an additional 50% of the Lock-Up Shares if the closing price of SPNV’s Class A common stock equals or exceeds $15.00 per share for any 20 trading days within any 30-trading day period commencing at least 30 days following the Closing. Such restrictions apply to the shares of SPNV’s Class A common stock and SPNV’s warrants, including shares of Offerpad Solutions Class A common stock issuable upon conversion of SPNV’s private placement warrants held by the Sponsor and the SPNV Insiders immediately following the Closing.

In addition, the Sponsor has agreed that 20% of its shares of Class B common stock issued in connection with the IPO (the “Sponsor Shares”) will be unvested and subject to forfeiture as of the Closing and will only vest if, during the five year period following the Closing, (i) the volume weighted average price of SPNV’s Class A common stock equals or exceeds $12.00 for any twenty trading days within a period of thirty consecutive trading days or (ii) there is a change of control of Supernova. Any Sponsor Shares that remain unvested after the fifth anniversary of the Closing will be forfeited.

The Sponsor Support Agreement will terminate upon the termination of the Merger Agreement if the Closing does not occur.

Subscription Agreements

In connection with the execution of the Merger Agreement, SPNV entered into Subscription Agreements with the PIPE Investors, pursuant to which the PIPE Investors agreed to purchase, in the aggregate, 20,000,000 shares of Offerpad Solutions Class A common stock at a purchase price of $10.00 per share for an aggregate commitment of $200,000,000. The closings under the Subscription Agreements will occur substantially concurrently with the Closing, subject to, among other things, the satisfaction of each condition precedent to the Closing set forth in the Merger Agreement, all representations and warranties of SPNV contained in the Subscription Agreements being true and correct in all material respects at and as of the Closing Date, satisfaction, performance and compliance by SPNV and each PIPE Investor in all material respects with the covenants, agreements and conditions contained therein, no amendment or modification of, or waiver with respect to SPNV’s obligation to effect the Closing that would reasonably be expected to materially, adversely and disproportionately as compared to other PIPE Investors affect the economic benefits of each PIPE Investor without having received such PIPE Investor’s prior written consent and that there is not in force any order, judgment or injunction entered by or with any governmental authority enjoing or prohibiting the issuance and sale of shares under the Subscription Agreements. Additionally, pursuant to the Subscription Agreements, the PIPE Investors agreed to waive any claims that they may have at the Closing or in the future as a result of, or arising out of, the Subscription Agreements against


 

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SPNV with respect to the trust account. For additional information, see “Proposal No. 1—The Business Combination Proposal—Certain Agreements Related to the Business Combination— Subscription Agreements.”

SPNV Forward Purchase Agreement

In connection with the closing of the SPNV IPO, SPNV entered into forward purchase agreements pursuant to which affiliates of Alexander M. Klabin and Spencer Rascoff, the Co-Chairs of SPNV, agreed to purchase, upon the closing of SPNV’s initial business combination, an aggregate of 5,000,000 shares of Offerpad Solutions Class A common stock and an aggregate of 1,666,667 warrants to purchase one share of Offerpad Solutions Class A common stock, for an aggregate purchase price of $50,000,000, or $10.00 per share of Offerpad Solutions Class A common stock and one-third of one warrant to purchase one share of Offerpad Solutions Class A common stock. For additional information, see “Proposal No. 1— The Business Combination Proposal—Certain Agreements Related to the Business Combination—SPNV Forward Purchase Agreement.”

2021 Plan

On March 17, 2021, the SPNV Board adopted, subject to stockholder approval, the 2021 Plan for the purpose of providing a means through which to enhance the ability to attract, retain and motivate persons who make (or are expected to make) important contributions to Offerpad Solutions by providing these individuals with equity ownership opportunities and/or equity-linked compensatory opportunities. The SPNV Board believes that equity awards are necessary to remain competitive and are essential to recruiting and retaining the highly qualified employees. Stockholders are being asked to consider and approve the 2021 Plan. For additional information, please see the section entitled “Proposal No. 4—The Incentive Plan Proposal.”

ESPP

On March 17, 2021, the SPNV Board adopted, subject to stockholder approval, the ESPP for the purpose of providing a means through which to provide employees of Offerpad Solutions and its participating subsidiaries with the opportunity to purchase Offerpad Solutions Class A common stock at a discount through accumulated payroll deductions during successive offering periods. The SPNV Board believes that the ESPP enhances employees’ sense of participation in performance, aligns their interests with those of stockholders, and is a necessary and powerful incentive and retention tool that benefits stockholders. Stockholders are being asked to consider and approve the ESPP. For additional information, please see the section entitled “Proposal No. 5—The ESPP Proposal.”

Impact of the Business Combination on Offerpad Solutions’ Public Float

It is anticipated that, upon the Closing: (i) existing stockholders of Offerpad will own approximately 74.9% of Offerpad Solutions on a fully diluted net exercise basis; (ii) SPNV’s public stockholders (other than the PIPE Investors) will retain an ownership interest of approximately 13.4% in Offerpad Solutions on a fully diluted net exercise basis; (iii) the PIPE Investors will own approximately 6.7% of Offerpad Solutions on a fully diluted net exercise basis; and (iv) the Sponsor (and its affiliates, including the purchasers pursuant to the SPNV Forward Purchase) will own approximately 5.0% of Offerpad Solutions on a fully diluted net exercise basis. These indicative levels of ownership interest: (i) exclude the impact of the shares of SPNV’s Class A common stock underlying warrants and (ii) assume that no public stockholder exercises redemption rights with respect to its shares for a pro rata portion of the funds in the trust account.

For more information, please see the sections entitled “Unaudited Pro Forma Condensed Combined Financial Information.”


 

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The following table illustrates varying ownership levels in Offerpad Solutions at the Closing, assuming no redemptions by SPNV’s public stockholders and the maximum redemptions by SPNV’s public stockholders that would still result in satisfaction of the Available Closing SPNV Cash condition in the Merger Agreement as described elsewhere in this proxy statement/prospectus (“Maximum Redemptions”):

 

     Assuming No Redemptions     Assuming Maximum Redemptions  

Stockholder

   Shares      Percentage     Shares      Percentage  

Former OfferPad equityholders(1)(2)

     225,000,000        74.9     225,000,000        85.5

Sponsor and related parties(3)

     15,062,500        5.0     15,062,500        5.7

Former Supernova Class A stockholders(4)

     40,250,000        13.4     3,100,000        1.2

PIPE Investors

     20,000,000        6.7     20,000,000        7.6

Total shares of Offerpad Solutions common stock outstanding at closing of the transaction(1)(2)(5)

     300,312,500        100     263,162,500        100

 

(1)

Amount includes 14,815,804 shares of Class B common stock of Offerpad Solutions to be issued to Brian Bair or entities controlled by Mr. Bair, which will entitle the holders to 10 votes per share until the earlier of (a) the date that is nine months following the date on which Mr. Bair (x) is no longer providing services, whether upon death, resignation, removal or otherwise, to Offerpad Solutions as a member of the senior leadership team, officer or director and (y) has not provided any such services for the duration of such nine-month period; and (b) the date as of which the Mr. Bair or his permitted transferees have transferred, in the aggregate, more than seventy-five (75%) of the shares of Class B common stock that were held by Mr. Bair and his permitted transferees immediately following the Closing.

(2)

Amount presents shares on a fully diluted, net exercise basis. The actual number of outstanding shares of Offerpad Solutions common stock held by former Offerpad equity holders at Closing will vary depending on the number of Offerpad options that remain unexercised prior to Closing. Based on shares of Offerpad capital stock outstanding as of June 16, 2021, an estimated 199,992,460 shares of Offerpad Solutions common stock would be issued to Offerpad equityholders at Closing.

(3)

Amount includes 10,062,500 shares of Class A common stock of Offerpad Solutions to be issued upon conversion of outstanding Class B common stock of Supernova, of which 8,058,050 shares will be vested as of the Closing and 2,004,450 shares will be unvested as of the Closing, and 5,000,000 shares of Class A common stock of Offerpad Solutions to be purchased by affiliates of Mr. Klabin and Mr. Rascoff pursuant to the SPNV Forward Purchase Agreements.

(4)

The underwriters for the SPNV IPO, Jefferies and J.P. Morgan (“J.P. Morgan”), will collectively receive approximately $14.1 million of deferred underwriting commissions in connection with the consummation of SPNV’s initial business combination, irrespective of the amount of redemptions by SPNV’s public stockholders. Assuming no redemptions, the underwriters will receive deferred commissions of $0.35 per public share that remains outstanding after the Transactions. Assuming Maximum Redemptions, the underwriters will receive deferred commissions of approximately $4.54 per public share that remains outstanding after the Transactions.

(5)

Stockholders will experience additional dilution to the extent Offerpad Solutions issues additional shares after the Closing. The tables above do not include (i) up to 13,416,667 shares of Offerpad Solutions Class A common stock that will be issuable upon exercise of the public warrants at an exercise price of $11.50 per share, (ii) up to 8,366,667 shares of Offerpad Solutions Class A common stock that will be issuable upon exercise of the private placement warrants and warrants to be purchased as part of the SPNV Forward Purchase at an exercise price of $11.50 per share, (iii) shares of Offerpad Solutions Class A common stock that will be available for issuance under the 2021 Plan, which will initially be equal to 10% of the fully-diluted shares as of the Closing or (iv) shares of Offerpad Solutions Class A common stock that will be available for issuance under the ESPP, which will initially be equal to 1% of the fully-diluted shares as of the Closing. The following table illustrates the impact on relative ownership levels assuming the issuance of all such shares.



 

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     Assuming No Redemptions     Assuming Maximum
Redemptions
 
     Shares      Percentage     Shares      Percentage  

Total shares of Offerpad Solutions common stock outstanding at closing of the transaction

     300,312,500        84.0     263,162,500        83.2

Shares underlying public warrants

     13,416,667        3.8     13,416,667        4.2

Shares underlying private placement and SPNV forward purchase warrants

     8,366,667        2.3     8,366,667        2.7

Shares initially reserved for issuance under 2021 Plan(a)

     32,197,762        9.0     28,482,762        9.0

Shares initially reserved for issuance under ESPP(a)

     3,219,776        0.9     2,848,276        0.9

Total

     357,513,372        100.0     316,276,872        100.0

 

(a)

The number of shares of Offerpad Solutions Class A common stock available for issuance under the 2021 Plan and the ESPP will be annually increased on January 1 of each calendar year beginning in 2022 and ending in 2031 by amounts described in the sections entitled “Proposal No. 4—The Incentive Plan Proposal” and “Proposal No. 5—The ESPP Proposal” elsewhere in this proxy statement/prospectus.

Additionally, subject to the rules of the NYSE and Offerpad Solutions’ organizational documents, the board of directors of Offerpad Solutions will retain broad authority after the Transactions to issue additional capital stock without obtaining stockholder approval.

Matters Being Voted On

The stockholders of SPNV will be asked to consider and vote on the following proposals at the special meeting:

 

  1.

a proposal to approve the business combination described in this proxy statement/prospectus, including (a) adopting the Merger Agreement and (b) approving the other transactions contemplated by the Merger Agreement and related agreements described in this proxy statement/prospectus. Please see the section entitled “Proposal No. 1—The Business Combination Proposal”;

 

  2.

a proposal to approve and adopt the Proposed Charter in the form attached hereto as Annex B. Please see the section entitled “Proposal No. 2—The Charter Proposal”;

 

  3.

a proposal to vote upon, on a non-binding advisory basis, certain governance provisions in the Proposed Charter, presented separately in accordance with the requirements of the SEC. Please see the section entitled “Proposal No. 3—The Governance Proposal”;

 

  4.

a proposal to approve the 2021 Plan. Please see the section entitled “Proposal No. 4—The Incentive Plan Proposal”;

 

  5.

a proposal to approve the ESPP. Please see the section entitled “Proposal No. 5—The ESPP Proposal”;

 

  6.

a proposal to approve, for purposes of complying with the applicable provisions of NYSE Listing Rule 312, the issuance of more than 20% of SPNV’s issued and outstanding shares of common stock and the issuance of shares of Class A common stock and warrants to related parties of SPNV, in each case in connection with the business combination. Please see the section entitled “Proposal No. 6—The NYSE Proposal”; and

 

  7.

a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the business combination proposal, the charter proposal, the governance proposal, the incentive plan proposal, the ESPP proposal or the NYSE proposal. Please see the section entitled “Proposal No. 7—The Adjournment Proposal.


 

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Each of the business combination proposal, the charter proposal, the incentive plan proposal, the ESPP proposal and the NYSE proposal (each a “Condition Precedent Proposal” and collectively, the “Condition Precedent Proposals”) is cross-conditioned on the approval of each other. Each of the governance proposal and the adjournment proposal is not conditioned upon the approval of any other proposal set forth in this proxy statement/prospectus.

Date, Time and Place of Special Meeting of SPNV’s Stockholders

The special meeting of stockholders of SPNV will be held via live webcast at                  Eastern Time, on                 , 2021. The special meeting can be accessed by visiting                 , where you will be able to listen to the meeting live and vote during the meeting. Please note that you will only be able to access the special meeting by means of remote communication.

At the special meeting, stockholders will be asked to consider and vote upon the business combination proposal, the charter proposal, the governance proposal, the incentive plan proposal, the ESPP proposal the NYSE proposal and if necessary, the adjournment proposal to permit further solicitation and vote of proxies if SPNV is not able to consummate the Transactions.

Voting Power; Record Date

Stockholders will be entitled to vote or direct votes to be cast at the special meeting if they owned shares of SPNV’s common stock at the close of business on June 21, 2021, which is the record date for the special meeting. Stockholders will have one vote for each share of SPNV’s common stock owned at the close of business on the record date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. SPNV warrants do not have voting rights. On the record date, there were 50,312,500 shares of SPNV’s common stock outstanding, of which 40,250,000 were public shares with the rest being held by the Sponsor and the Independent Persons.

Quorum and Vote of SPNV Stockholders

A quorum of SPNV stockholders is necessary to hold a valid meeting. A quorum will be present at the SPNV special meeting if a majority of the outstanding shares entitled to vote at the meeting are represented in person or by proxy. Proxies that are marked “abstain” will be treated as shares present for purposes of determining the presence of a quorum on all matters. Broker non-votes will not be counted for the purposes of determining the existence of a quorum or for purposes of determining the number of votes cast at the special meeting.

The Sponsor and Independent Persons own of record and are entitled to vote 20% of the outstanding shares of SPNV’s common stock as of the record date. Such shares, as well as any shares of SPNV’s common stock acquired in the aftermarket by the Sponsor, will be voted in favor of the proposals presented at the special meeting.

The proposals presented at the special meeting will require the following votes:

 

   

the approval of each of the business combination proposal, the governance proposal (which is a non-binding advisory vote), the incentive plan proposal, the ESPP proposal, the NYSE proposal and the adjournment proposal require the affirmative vote of the holders of a majority of the shares of SPNV’s common stock that are present and entitled to vote at the special meeting. Accordingly, if a valid quorum is established, a SPNV stockholder’s failure to vote by proxy or to vote at the special meeting with regard to the business combination proposal, the governance proposal, the incentive plan proposal, the ESPP proposal, the NYSE proposal and the adjournment proposal will have no effect on such proposals; and

 

   

the approval of the charter proposal requires the affirmative vote of the holders of a majority of the outstanding shares of SPNV’s common stock entitled to vote thereon at the special meeting, which majority shall include the affirmative vote or written consent of the holders of a majority of the shares of SPNV’s


 

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Class B common stock then outstanding, voting separately as a class. Accordingly, if a valid quorum is established, a SPNV stockholder’s failure to vote by proxy or to vote at the special meeting with regard to the charter proposal will have the same effect as a vote “against” such proposal.

Abstentions will have the same effect as a vote “against” the charter proposal, but will have no effect on the other proposals.

Consummation of the Transactions is conditioned on the approval of each of the Condition Precedent Proposals. If any of the Condition Precedent Proposals are not approved, we will not consummate the Transactions.

Redemption Rights

Pursuant to SPNV’s current certificate of incorporation, a public stockholder may demand that SPNV redeem such shares for cash if the business combination is consummated. Public stockholders will be entitled to receive cash for these shares only if they demand that SPNV redeem their shares for cash no later than the second business day prior to the vote on the business combination proposal by delivering their stock to SPNV’s transfer agent prior to the vote at the meeting. If the business combination is not completed, these shares will not be redeemed. If a public stockholder properly demands redemption, SPNV will redeem each public share for a full pro rata portion of the trust account, calculated as of two business days prior to the Closing. As of June 21, 2021, the record date for the special meeting, this would amount to approximately $10.00 per share. If a public stockholder exercises its redemption rights, then it will be exchanging its shares of SPNV’s common stock for cash and will no longer own the shares. Please see the section entitled “Special Meeting of SPNV Stockholders—Redemption Rights” for a detailed description of the procedures to be followed if you wish to redeem your shares for cash.

Notwithstanding the foregoing, a public stockholder, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from seeking redemption rights with respect to more than 15% of the public shares.

Accordingly, all public shares in excess of 15% held by a public stockholder, together with any affiliate of such holder or any other person with whom such holder is acting in concert or was a “group,” will not be redeemed for cash.

The business combination will not be consummated if SPNV has net tangible assets of less than $5,000,001 after taking into account public stockholders that have properly demanded redemption of their shares for cash.

Holders of SPNV warrants will not have redemption rights with respect to such securities.

Appraisal Rights

SPNV stockholders, SPNV unitholders and SPNV warrant holders do not have appraisal rights in connection with the Transactions under the DGCL.

Proxy Solicitation

Proxies may be solicited by mail, telephone or in person. SPNV has engaged Morrow Sodali LLC to assist in the solicitation of proxies. If a stockholder grants a proxy, it may still vote its shares during the meeting if it revokes its proxy before the special meeting. A stockholder may also change its vote by submitting a later-dated proxy as described in the section entitled “Special Meeting of SPNV Stockholders—Revoking Your Proxy.”


 

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Interests of Certain Persons in the Business Combination

In considering the recommendation of the SPNV Board to vote in favor of approval of the business combination proposal and the other proposals, stockholders should keep in mind that the Sponsor and the other SPNV Insiders have interests in such proposals that are different from, or in addition to, those of SPNV stockholders generally. In particular:

 

   

On September 9, 2020, the Sponsor paid $25,000 in exchange for 11,500,000 founder shares. On September 14, 2020, SPNV effectuated a 0.75-for-1 reverse split of the founder shares, resulting in an aggregate outstanding amount of 8,625,000 founder shares. On September 24, 2020, the Sponsor transferred 172,500 founder shares in the aggregate to SPNV’s five independent director nominees (four of whom remain directors as of the date of this filing (and thus constitute “SPNV Insiders” as used herein) and one of whom ceased to be a director effective as of March 4, 2021) (such five persons, collectively, the “Independent Persons”). On October 20, 2020, SPNV effectuated a 6-for-7 stock split of the founder shares, resulting in 10,062,500 founder shares outstanding in the aggregate, 9,861,250 of which were held by the Sponsor and 201,250 of which were held by the Independent Persons. If the Transactions or another business combination are not consummated by October 23, 2022, subject to any extension period, SPNV will cease all operations except for the purpose of winding up, redeeming 100% of the outstanding public shares for cash and, subject to the approval of its remaining stockholders and the SPNV Board, dissolving and liquidating. In such event, the 10,062,500 founder shares now held collectively by the Sponsor and the Independent Persons would be worthless because the holders thereof are not entitled to participate in any redemption or distribution with respect to such shares. Of the 9,861,250 founder shares held by the Sponsor, 80% of such shares (i.e., 7,889,000 shares) will be vested as of the Closing and 20% of such shares (i.e., 1,972,250 shares) will be unvested and subject to forfeiture and earnout as of the Closing, as described further above. The 7,889,000 vested founder shares held by the Sponsor and the 201,250 founder shares held by the Independent Persons, or an aggregate of 8,090,250 founder shares, had an aggregate market value of $80,336,183 based upon the closing price of $9.93 per share on the NYSE on June 21, 2021, the record date for the special meeting. The 1,972,250 unvested founder shares held by the Sponsor had an aggregate market value of $23,667,000 based upon an assumed price of $12.00 per share (i.e., the price at which such founder shares will become vested, as described further above). Accordingly, applying the foregoing assumptions, the aggregate return on the founder shares would be approximately $103,978,183 (i.e., an amount equal to (i) (A) the $80,336,183 aggregate market value of the 8,090,250 founder shares referenced immediately above plus (B) the $23,667,000 aggregate market value of the 1,972,250 founder shares referenced immediately above minus (ii) the $25,000 aggregate amount that the Sponsor paid for the founder shares).

 

   

The Sponsor purchased an aggregate of 6,700,000 private placement warrants from SPNV for an aggregate purchase price of $10,050,000 (or $1.50 per private placement warrant). These purchases took place on a private placement basis simultaneously with the consummation of the SPNV IPO. A portion of the proceeds SPNV received from these purchases were placed in the trust account. Such private placement warrants had an aggregate market value of $10,050,000 based upon the closing price of $1.50 per warrant on the NYSE on June 21, 2021, the record date for the special meeting. Accordingly, applying the foregoing assumptions, the aggregate return on the private placement warrants would be approximately $0 (i.e., an amount equal to (i) the $10,050,000 aggregate market value of the private placement warrants minus (ii) the $10,050,000 aggregate purchase price of the private placement warrants). The private placement warrants will become worthless if SPNV does not consummate a business combination by October 23, 2022.

 

   

Alexander Klabin will become a director of Offerpad Solutions after the closing of the Transactions. As such, in the future he will receive compensation that the post-combination board of directors determines to pay to its non-employee directors.

 

   

If SPNV is unable to complete a business combination within the completion window, its executive officers will be personally liable under certain circumstances to ensure that the proceeds in the trust account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by SPNV for services rendered or contracted for or products sold to SPNV. If SPNV consummates a business combination, on the other hand, SPNV will be liable for all such claims.


 

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SPNV’s officers and directors, and their affiliates are entitled to reimbursement of out-of-pocket expenses incurred by them in connection with certain activities on SPNV’s behalf, such as identifying and investigating possible business targets and business combinations. As of June 20, 2021, there were no out-of-pocket expenses payable to SPNV’s officers and directors and their affiliates. SPNV does not currently owe any loans or fee reimbursements to the Sponsor, officers or directors that are payable in connection with the business combination. However, if SPNV fails to consummate a business combination within the completion window, they will not have any claim against the trust account for reimbursement. Accordingly, SPNV may not be able to reimburse these expenses if the Transactions or another business combination, are not completed within the completion window.

 

   

The SPNV Insiders will be entitled to continued indemnification and the continuation of directors’ and officers’ liability insurance.

Involvement of Underwriters of SPNV IPO in the Transactions

As disclosed elsewhere herein, Jefferies and J.P. Morgan served as the underwriters for the SPNV IPO and will collectively receive approximately $14.1 million of deferred underwriting commissions therefrom in connection with the consummation of SPNV’s initial business combination. Jefferies and J.P. Morgan have agreed to waive their rights to their deferred underwriting commissions held in the Trust Account in the event SPNV does not complete its initial business combination prior to the end of the completion window (subject to any extension period thereof), and in such a circumstance, will not receive any of such funds.

As disclosed under “Proposal No. 1—The Business Combination Proposal—Background of the Transactions,” following the SPNV IPO, SPNV commenced a search for prospective businesses and assets to acquire. Jefferies and J.P. Morgan each provided SPNV with informal assistance during such search process by helping SPNV develop and evaluate its database of more than 400 potential targets, for which neither Jefferies nor J.P. Morgan is entitled to fees.

As described further below, Jefferies and J.P. Morgan also are providing certain services in connection with the Transactions, and will receive compensation in connection therewith. Jefferies’ and J.P. Morgan’s receipt of the deferred underwriting commissions is not dependent on their provision of services in connection with the Transactions.

As discussed under “Proposal No. 1—The Business Combination Proposal—Background of the Transactions,” Jefferies is serving as SPNV’s exclusive financial advisor in connection with the Transactions. Pursuant to the terms of Jefferies’ engagement with SPNV, Jefferies has agreed to provide SPNV with financial advice and assistance in connection with the Transactions, including (i) rendering advice on market terms, (ii) negotiating transaction terms, (iii) assisting SPNV with understanding Offerpad’s business and (iv) facilitating discussions between the parties. Upon the consummation of the Transactions, Jefferies will receive a financial advisory fee of $10 million (the “Jefferies Financial Advisory Fee”). SPNV also has agreed to provide Jefferies with customary expense reimbursement, including fees and expenses of its counsel, and to indemnify it and certain related persons against liabilities arising out of Jefferies’ financial advisory engagement and the Transactions. Neither J.P. Morgan nor any other entity (other than Jefferies) is serving as SPNV’s financial advisor in connection with the Transactions.

Additionally, as discussed under “Proposal No. 1—The Business Combination Proposal—Background of the Transactions,” J.P. Morgan and Jefferies are serving as joint placement agents in connection with the PIPE Investment. Pursuant to the terms of J.P. Morgan’s and Jefferies’ placement agent engagement with SPNV, J.P. Morgan and Jefferies have agreed to assist SPNV in (i) identifying and contacting potential PIPE Investors, (ii) if requested by SPNV, preparing an investor presentation and/or marketing materials for distribution to potential PIPE Investors, (iii) soliciting and receiving offers to purchase shares of Offerpad Solutions Class A common stock pursuant to the PIPE Investment and (iv) SPNV’s negotiation of the financial aspects of the PIPE


 

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Investment. In respect of such services, upon the consummation of the Transactions, J.P. Morgan and Jefferies will collectively receive a placement fee equal to 3.5% of the aggregate price at which such shares of Offerpad Solutions Class A common stock are sold pursuant to the PIPE Investment, expected to be $7 million (the “Placement Fee”), and whether or not the Transactions are consummated, each of J.P. Morgan and Jefferies will receive expense reimbursement customary for a PIPE transaction of this nature (subject to the terms and conditions of their engagement letter with SPNV). SPNV also has agreed to indemnify J.P. Morgan and Jefferies and certain related persons against liabilities arising out of their placement agent engagement or information contained in or omitted from the offering materials in connection with the PIPE Investment.

Because (i) Jefferies and J.P. Morgan will only receive their deferred underwriting commissions upon the consummation of SPNV’s initial business combination during the completion window (subject to any extension period thereof), (ii) Jefferies will only receive the Jefferies Financial Advisory Fee upon the consummation of the Transactions, (iii) J.P. Morgan will receive a financial advisory fee from Offerpad (for J.P. Morgan’s services as Offerpad’s financial advisor in connection with the Transactions) only upon the consummation of the Transactions and (iv) J.P. Morgan and Jefferies will only receive the Placement Fee upon the consummation of the Transactions, Jefferies and J.P. Morgan have an interest in the Transactions being consummated. Such interest may have presented, and may in the future present, a conflict of interest. SPNV was aware of and considered such potential conflicts in engaging Jefferies as its financial advisor and J.P. Morgan and Jefferies as joint placement agents. SPNV’s stockholders should consider the roles of Jefferies and J.P. Morgan in evaluating “Proposal No. 1—The Business Combination Proposal” and the other proposals.

Number, Terms of Office and Election of Directors and Officers

The SPNV Board consists of seven members and is divided into three classes with only one class of directors being elected in each year and each class (except for those directors appointed prior to our first annual meeting of stockholders) serving a three-year term. In accordance with the NYSE corporate governance requirements, we are not required to hold an annual meeting until one year after our first fiscal year end following our listing on the NYSE. The term of office of the first class of directors, consisting of Ken Fox, will expire at our first annual meeting of stockholders. The term of office of the second class of directors, consisting of Jim Lanzone, Gregg Renfrew and Rajeev Singh, will expire at the second annual meeting of stockholders. The term of office of the third class of directors, consisting of Spencer M. Rascoff, Alexander M. Klabin and Robert D. Reid, will expire at the third annual meeting of stockholders.

Prior to our initial business combination, only holders of our founder shares will have the right to elect all of our directors and remove members of the SPNV Board for any reason, and holders of our public shares will not have the right to vote on the election of directors during such time. This provision of our current certificate of incorporation may only be amended by resolution approved by the holders of a majority of SPNV’s Class B common stock. Approval of our initial business combination will require the affirmative vote of the holders of the shares of SPNV’s common stock that are present and entitled to vote at the special meeting. Subject to any other special rights applicable to the stockholders, prior to our initial business combination, any vacancies on the SPNV Board may be filled only by the affirmative vote of a majority of the directors then in office.

Our officers are appointed by the SPNV Board and serve at the discretion of the SPNV Board, rather than for specific terms of office. The SPNV Board is authorized to appoint persons to the offices set forth in our bylaws as it deems appropriate. Our bylaws provide that our officers may consist of a Chair or Co-Chairs of the SPNV Board, a Chief Executive Officer, a President, a Chief Financial Officer, a Chief Operating Officer, a Secretary, and such other offices (including without limitation, Vice Presidents, Assistant Secretaries and a Treasurer) as may be determined by the SPNV Board.


 

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Recommendation to Stockholders

The SPNV Board believes that the business combination proposal and the other proposals to be presented at the special meeting are fair to and in the best interest of SPNV’s stockholders and unanimously recommends that its stockholders vote “FOR” the business combination proposal, “FOR” the charter proposal, “FOR” the governance proposal, “FOR” the incentive plan proposal, “FOR” the ESPP proposal, “FOR” the NYSE proposal and “FOR” the adjournment proposal, if presented.

When you consider the SPNV Board’s recommendation of these proposals, you should keep in mind that our directors and officers have interests in the business combination that are different from, or in addition to, the interests of SPNV stockholders generally. Please see the section entitled “Proposal No. 1—The Business Combination Proposal—Interests of Certain Persons in the Business Combination” for additional information. The SPNV Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Transactions and in recommending to the SPNV stockholders that they vote “FOR” the proposals presented at the special meeting.

Conditions to Closing of Transactions

Conditions to the Obligations of Each Party

The obligations of each party to the Merger Agreement to consummate, or cause to be consummated, the Transactions are subject to the satisfaction of the following conditions, any one or more of which may be waived (if legally permitted) in writing by Offerpad and SPNV:

 

   

the waiting period(s) under the HSR Act in respect of the Transactions (and any extension thereof, or any timing agreements, understandings or commitments obtained by request or other action of the U.S. Federal Trade Commission and/or the U.S. Department of Justice, as applicable) shall have expired or been terminated;

 

   

there will not be in force any law adopted following the date of the Merger Agreement or order, judgment, injunction, decree, writ, stipulation, determination or award, in each case, entered by or with any governmental authority enjoining or prohibiting the consummation of the Transactions;

 

   

SPNV will have at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) remaining upon the consummation of the Closing (after giving effect to the SPNV Stockholder Redemption, PIPE Investment and SPNV Forward Purchase, and the other transactions contemplated to occur on the Closing Date, including the payment of SPNV’s and Offerpad’s expenses);

 

   

SPNV stockholders’ approval of the Condition Precedent Proposals, as described in this proxy statement/prospectus, will have been obtained in accordance with the DGCL, SPNV’s governing documents and the rules and regulations of the NYSE (“SPNV Stockholder Approval”);

 

   

Offerpad stockholders’ approval of the Merger Agreement and the Transactions will have been obtained in accordance with the DGCL and Offerpad’s governing documents (“Offerpad Stockholder Approval”);

 

   

the registration statement of which this proxy statement/prospectus forms a part (the “Registration Statement”) will have become effective under the Securities Act and no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been initiated or threatened by the SEC and not withdrawn; and

 

   

the shares of Offerpad Solutions Class A common stock to be issued in connection with the business combination and the other Transactions shall have been approved for listing on the NYSE.

On April 30, 2021, the waiting period under the HSR Act expired.


 

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Conditions to the Obligations of the SPNV Parties

The obligations of the SPNV Parties to consummate, or cause to be consummated the Transactions are subject to the satisfaction of the following additional conditions, any one or more of which may be waived in writing by SPNV:

 

   

certain of the representations and warranties of Offerpad pertaining to its corporate organization, due authorization, absence of conflicts, current capitalization and absence of stock ownership of SPNV will be true and correct (without giving any effect to any limitation as to “materiality” or “Material Adverse Effect” or any similar limitation set forth therein) in all material respects as of the Closing Date, except, in each case, to the extent such representations and warranties expressly relate to an earlier date, and in such case, will be so true and correct on and as of such earlier date;

 

   

the representations and warranties of Offerpad pertaining to absence of a material adverse effect will be true and correct in all respects as of the Closing Date;

 

   

each of the remaining representations and warranties of Offerpad will be true and correct in all respects (without giving any effect to any limitation as to “materiality” or “Material Adverse Effect” or any similar limitation set forth therein) as of the Closing Date (except to the extent such representations and warranties expressly relate to an earlier date, and in such case, will be so true and correct as of such earlier date), except, in either case, where the failure of such representations and warranties to be so true and correct, individually or in the aggregate, has not had, and would not reasonably be expected to result in, a Material Adverse Effect;

 

   

each of the covenants and agreements of Offerpad to be performed as of or prior to the Closing will have been performed in all material respects (subject to a 20-day cure period); and

 

   

Offerpad will have delivered to SPNV a certificate signed by an officer of Offerpad, dated the Closing Date, certifying that, solely in such person’s capacity as an officer of Offerpad, the foregoing conditions have been fulfilled.

Conditions to the Obligations of Offerpad

The obligations of Offerpad to consummate, or cause to be consummated, the Transactions are subject to the satisfaction of the following additional conditions, any one or more of which may be waived in writing by Offerpad:

 

   

certain of the representations and warranties of the SPNV Parties pertaining to corporate organization, due authorization and absence of conflicts will be true and correct (without giving any effect to any limitation as to “materiality” or “Material Adverse Effect” or any similar limitation set forth therein) in all material respects as of the Closing Date, except, in each case, to the extent such representations and warranties expressly relate to an earlier date, and in such case, will be so true and correct on and as of such earlier date;

 

   

certain of the representations and warranties of the SPNV Parties regarding capitalization will be true and correct, other than for de minimis inaccuracies, as of the Closing Date, as though then made;

 

   

the representations and warranties of the SPNV Parties pertaining to absence of a material adverse effect will be true and correct in all respects as of the Closing Date;

 

   

each of the remaining representations and warranties of the SPNV Parties will be true and correct (without giving any effect to any limitation as to “materiality” or “Material Adverse Effect” or any similar limitation set forth therein) in all respects as of the Closing Date (except to the extent such representations and warranties expressly relate to an earlier date, and in such case, will be so true and correct on and as of such earlier date); except, in either case, where the failure of such representations and warranties to be so true and correct, individually or in the aggregate, has not had, and would not reasonably be expected to result in, a Material Adverse Effect;


 

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each of the covenants of the SPNV Parties to be performed as of or prior to the Closing will have been performed in all material respects (subject to a 20-day cure period or if earlier, the Termination Date);

 

   

the Available Closing SPNV Cash will not be less than $250,000,000; and

 

   

SPNV will have delivered to Offerpad a certificate signed by an officer of SPNV, dated the Closing Date, certifying that, solely in such person’s capacity as an officer of SPNV, the foregoing conditions have been fulfilled.

Tax Consequences of the Redemption to SPNV Stockholders and the Business Combination

For a description of certain U.S. federal income tax consequences of the exercise of redemption rights, please see the information set forth in “U.S. Federal Income Tax Considerations—Material U.S. Federal Income Tax Consequences of the Redemption to SPNV Stockholders and the Business Combination.”

Anticipated Accounting Treatment

The business combination will be accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, SPNV will be treated as the “acquired” company for financial reporting purposes. Accordingly, the business combination will be treated as the equivalent of Offerpad issuing stock for the net assets of SPNV, accompanied by a recapitalization. The net assets of SPNV will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the business combination will be those of Offerpad. See the accounting treatment discussed elsewhere in this proxy statement/prospectus.

Regulatory Matters

Under the HSR Act and the rules that have been promulgated thereunder by the Federal Trade Commission (the “FTC”), certain transactions may not be consummated unless information has been furnished to the Antitrust Division of the Department of Justice (the “Antitrust Division”) and the FTC and certain waiting period requirements have been satisfied. The Transactions are subject to these requirements and may not be completed until the expiration of a 30-day waiting period following the filing of the required Notification and Report Forms with the Antitrust Division and the FTC or until early termination is granted. If the FTC or the Antitrust Division issues a Request For Additional Information and Documentary Materials (a “Second Request”) within the initial 30-day waiting period, the waiting period with respect to the Transactions will be extended for an additional period of 30 calendar days, which will begin on the date on which the filing parties each certify compliance with the Second Request. Complying with a Second Request can take a significant period of time. On March 31, 2021, SPNV and Offerpad filed the required forms under the HSR Act with the Antitrust Division and the FTC. The initial 30-day waiting period with respect to the Transactions expired at 11:59 p.m. Eastern Time on April 30, 2021.

At any time before or after consummation of the Transactions, notwithstanding expiration of the waiting period under the HSR Act, the applicable competition authorities could take such action under applicable antitrust laws as each deems necessary or desirable in the public interest, including seeking to enjoin the consummation of the Transactions. Private parties may also seek to take legal action under the antitrust laws under certain circumstances. There is no assurance that the Antitrust Division, the FTC, any state attorney general, or any other government authority will not attempt to challenge the Transactions on antitrust grounds, and, if such a challenge is made, we cannot assure you as to its result.

Neither SPNV nor Offerpad is aware of any material regulatory approvals or actions that are required for completion of the Transactions other than the expiration of the waiting period under the HSR Act. It is presently contemplated that if any such additional regulatory approvals or actions are required, those approvals or actions will be sought. There can be no assurance, however, that any additional approvals or actions will be obtained.


 

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Risk Factors

In evaluating the proposals to be presented at the special meeting, you should carefully read this proxy statement/prospectus and especially consider the factors discussed in the section entitled “Risk Factors.”

These risk factors include, but are not limited to, the following:

 

   

Offerpad’s business and operating results may be significantly impacted by a number of factors, including general economic conditions, local or regional conditions in the markets in which it operates, the health of the U.S. residential real estate industry and governmental actions that impact it, risks associated with its real estate assets and the COVID-19 pandemic and attempts to contain it;

 

   

Offerpad’s limited operating history makes it difficult to evaluate its current business and future prospects and the risk of your investment;

 

   

Offerpad operates in a competitive and fragmented industry, and it may not be successful in attracting customers for its products and services or in competing effectively through management of its products or services, including home renovations, which could harm its business, results of operations and financial condition;

 

   

Offerpad has experienced rapid growth since inception, which may not be indicative of future growth, and, if it continues to grow rapidly, it may experience difficulties in managing its growth and expanding its operations and service offerings;

 

   

Offerpad’s business model and growth strategy depend on its marketing efforts and ability to maintain its brand and attract customers to its platform in a cost-effective manner;

 

   

Offerpad may be unsuccessful in launching or marketing new products or services, or launching existing products and services into new markets, or may be unable to successfully intergrate new offerings into its existing plaftorm, which would result in significant expense and may not achieve desired results;

 

   

Offerpad has had a history of losses since its inception, and it may not achieve or maintain profitability in the future;

 

   

Offerpad’s business is dependent upon its ability to acquire, accurately value and manage inventory and any decrease in availability of inventory, an ineffective pricing or portfolio management strategy, inaccurate information from prospective sellers or buyers with respect to their homes or ineffective home inspections may have an adverse effect on its business, sales and results of operations;

 

   

Prospective sellers and buyers of homes may choose not to transact online, which could harm Offerpad’s growth prospects;

 

   

Offerpad’s internal information technology systems may fail or suffer security breaches, loss or leakage of data, and other disruptions, which could disrupt its business or result in the loss of critical and confidential information;

 

   

Offerpad processes, stores and uses personal information and other data, which subjects it to governmental regulation and other legal obligations related to privacy, and violation of these privacy obligations could result in a claim for damages, regulatory action, loss of business, or unfavorable publicity;

 

   

Offerpad’s ability to compete depends in part on protecting its intellectual property and other propriety information and on maintaining necessary intellectual property licenses;

 

   

Offerpad opreates in a highly regulated industry and is subject to a wide range of federal, state and local laws, rules and regulations, including licensing and conduct requirements relating to its real estate brokers and brokerage-related businesses and mortgage products;


 

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Offerpad utilizes a significant amount of indebtedness in the operation of its business, and so its cash flows and operating results could be adversely affected by required payments of debt or related interest and other risks of its debt financing;

 

   

Offerpad relies on agreements with third parties to finance its business;

 

   

Offerpad will face additional risks relating to its capital structure following the business combination, including the potential impact on the value of its Class A common stock of the company’s multi-class structure, future resales of shares, or industry or securities analyst coverage;

 

   

The consummation of the Merger is subject to a number of conditions and if those conditions are not satisfied or waived, the Merger Agreement may be terminated in accordance with its terms and the Merger may not be completed;

 

   

SPNV and Offerpad will be subject to business uncertainties while the Merger is pending; and

 

   

If the perceived benefits of the business combination do not meet the expectations of investors or securities analysts, the market price of SPNV’s securities prior to the Closing may decline. The market value of Offerpad Solutions’ securities at the time of the business combination may vary significantly from their prices on the date the Merger Agreement was executed, the date of this proxy statement/prospectus, or the date on which SPNV’s stockholders vote on the business combination Proposal and the other proposals presented to them.


 

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SPNV’S SUMMARY HISTORICAL FINANCIAL INFORMATION

SPNV is providing the following summary historical financial information to assist you in your analysis of the financial aspects of the Transactions.

SPNV’s balance sheet data as of December 31, 2020 and statement of operations data for the period from August 31, 2020 (inception) through December 31, 2020 are derived from SPNV’s audited financial statements, included elsewhere in this proxy statement/prospectus. SPNV’s balance sheet data as of March 31, 2021, and statement of operations data for the period from January 1, 2021 through March 31, 2021 are derived from SPNV’s unaudited condensed financial statements included elsewhere in this proxy statement/prospectus.

The information is only a summary and should be read in conjunction with SPNV’s financial statements and related notes and “Other Information Related to SPNV” and “SPNV’s Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The historical results included below and elsewhere in this proxy statement/prospectus are not indicative of the future performance of SPNV.

SUPERNOVA PARTNERS ACQUISITION COMPANY, INC.

BALANCE SHEET

 

     March 31,
2021
     December 31,
2020
 
     (unaudited)         

Assets:

     

Current assets:

     

Cash

   $ 760,543      $ 1,079,633  

Due from related party

     19,148        —    

Prepaid expenses

     339,049        405,522  
  

 

 

    

 

 

 

Total current assets

     1,118,740        1,485,155  

Investments held in Trust Account

     402,674,662        402,578,522  
  

 

 

    

 

 

 

Total Assets

   $ 403,793,402      $ 404,063,677  
  

 

 

    

 

 

 

Liabilities and Stockholders’ Equity:

     

Current liabilities:

     

Accounts payable

   $ 82,160      $ 38,915  

Accrued expenses

     3,158,353        215,097  

Due to related party

     69        —    

Income tax payable

     17,620        4,749  

Franchise tax payable

     49,365        61,264  
  

 

 

    

 

 

 

Total current liabilities

     3,307,567        320,025  

Deferred legal fees

     100,000        100,000  

Deferred underwriting commissions

     14,087,500        14,087,500  

Derivative liabilities

     41,251,830        49,674,170  
  

 

 

    

 

 

 

Total Liabilities

     58,746,897        64,181,695  
  

 

 

    

 

 

 

Commitments and Contingencies

     

Class A common stock, $0.0001 par value; 34,004,650 and 33,488,198 shares subject to possible redemption at $10.00 per share as of March 31, 2021 and December 31, 2020, respectively

     340,046,500        334,881,980  

 

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     March 31,
2021
    December 31,
2020
 
     (unaudited)        

Stockholders’ Equity:

    

Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding

     —         —    

Class A common stock, $0.0001 par value; 100,000,000 shares authorized; 6,245,350 and 6,761,802 shares issued and outstanding (excluding 34,004,650 and 33,488,198 shares subject to possible redemption) as of March 31, 2021 and December 31, 2020, respectively

     625       676  

Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 10,062,500 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively

     1,006       1,006  

Additional paid-in capital

     25,214,729       30,379,198  

Accumulated deficit

     (20,216,355     (25,380,878
  

 

 

   

 

 

 

Total stockholders’ equity

     5,000,005       5,000,002  
  

 

 

   

 

 

 

Total Liabilities and Stockholders’ Equity

   $ 403,793,402     $ 404,063,677  
  

 

 

   

 

 

 

 

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SUPERNOVA PARTNERS ACQUISITION COMPANY, INC.

STATEMENT OF OPERATIONS

For the Period From August 31, 2020 (Inception) Through December 31, 2020

 

General and administrative expenses

   $ 229,377  

Franchise tax expenses

     61,264  
  

 

 

 

Total operating expenses

     (290,641

Other income (expense)

  

Change in fair value of derivative liabilities

     (24,193,170

Financing costs - derivative liabilities

     (970,840

Net gain on investments held in Trust Account

     78,522  
  

 

 

 

Loss before income tax expense

     (25,376,129

Income tax expense

     4,749  
  

 

 

 

Net loss

   $ (25,380,878
  

 

 

 

Weighted average shares outstanding of Class A common stock subject to possible redemption, basic and diluted

     35,891,064  
  

 

 

 

Basic and diluted net income per share, Class A common stock subject to possible redemption

   $ 0.00  
  

 

 

 

Weighted average shares outstanding of nonredeemable Class A and Class B common stock, basic and diluted

     12,232,461  

Basic and diluted net loss per share, nonredeemable Class A and Class B common stock

   $ (2.08
  

 

 

 

For the Three Months Ended March 31, 2021 (Unaudited)

 

General and administrative expenses

   $ 3,291,721  

Franchise tax expenses

     49,365  
  

 

 

 

Total operating expenses

     (3,341,086

Other income

  

Change in fair value of derivative liabilities

     8,422,340  

Net gain on investments held in Trust Account

     96,140  
  

 

 

 

Income before income tax expense

     5,177,394  

Income tax expense

     12,871  
  

 

 

 

Net income

   $ 5,164,523  
  

 

 

 

Weighted average shares outstanding of Class A common stock subject to redemption, basic and diluted

     33,493,936  
  

 

 

 

Basic and diluted net income per share, Class A common stock subject to redemption

   $ 0.00  
  

 

 

 

Weighted average shares outstanding of non redeemable Class A and Class B common stock, basic and diluted

     16,818,564  
  

 

 

 

Basic and diluted net income per share, non redeemable Class A and Class B common stock

   $ 0.31  
  

 

 

 

 

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OFFERPAD’S SUMMARY HISTORICAL FINANCIAL AND OPERATING DATA

The summary historical consolidated statements of operations and statements of cash flow data of Offerpad for the years ended December 31, 2020, 2019, and 2018 and the historical consolidated balance sheet data as of December 31, 2020 and 2019 are derived from Offerpad’s audited consolidated financial statements included elsewhere in this proxy statement/prospectus. The summary historical consolidated statements of operations and statements of cash flow data of Offerpad for the three months ended March 31, 2021 and 2020 and the historical consolidated balance sheet data as of March 31, 2021 are derived from Offerpad’s unaudited interim consolidated financial statements included elsewhere in this proxy statement/prospectus. Offerpad’s historical results are not necessarily indicative of the results that may be expected in the future, and Offerpad’s results for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2021 or any other period. You should read the following summary historical consolidated financial data together with “Offerpad’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Offerpad’s consolidated financial statements and related notes included elsewhere in this proxy statement/prospectus.

 

     For the three months ended
March 31,
    For the year ended
December 31,
 

Statement of Operations Data

   2021     2020     2020     2019     2018  
(in thousands, except share and per share data)    (unaudited)     (unaudited)                    

Revenue:

   $ 283,972     $ 367,655     $ 1,064,257     $ 1,075,882     $ 855,961  

Cost of revenue

     250,435       342,757       976,478       1,001,495       790,100  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     33,537       24,898       87,779       74,387       65,861  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses

     32,093       31,919       101,537       107,787       79,963  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net operating income (loss)

     1,444       (7,021     (13,758     (33,400     (14,102

Interest expense

     (1,918     (4,674     (10,031     (18,298     (18,329

Other income net

     241       230       834       —         —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Loss before income taxes

     (233     (11,465     (22,955     (51,698     (32,431

Income tax expense

     —         —         (163     (254     (506
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

   $ (233   $ (11,465   $ (23,118   $ (51,952   $ (32,937

Weighted average common shares outstanding, basic and diluted

     7,774,945       7,681,832       7,681,832       7,679,564       8,254,134  

Net loss per share, basic and diluted

   $ (0.03   $ (1.49   $ (3.01   $ (6.76   $ (3.99

 

     For the three months ended
March 31,
    For the year ended
December 31,
 

Statements of Cash Flow Data

   2021     2020     2020     2019     2018  
(in thousands)    (unaudited)     (unaudited)                    

Net cash provided by (used in):

          

Operating activities

   $ (48,112   $ 49,848     $ 154,864     $ (108,974   $ (78,687

Investing activities

     1,042       (10     (2,858     (979     (2,027

Financing activities

     25,388       (50,130     (131,147     122,503       88,764  

 

     As of
March 31,
     As of
December 31,
 

Balance Sheet Data

   2021      2020      2019  
(in thousands)    (unaudited)                

Total assets

   $ 266,347      $ 235,873      $ 385,891  

Total current liabilities

     224,857        190,298        353,094  

Total liabilities

     224,857        195,008        353,094  

Working capital

     34,055        36,992        26,491  

Total liabilities, temporary equity, and stockholders’ deficit

     266,347        235,873        385,891  

 

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SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following summary unaudited pro forma condensed combined statement of operations for the three months ended March 31, 2021 and for the year ended December 31, 2020 combine the historical statement of operations of SPNV and the historical consolidated statement of operations of Offerpad for such periods on a pro forma basis as if the business combination, the PIPE Investment and the transactions contemplated by the SPNV Forward Purchase Agreement had been consummated on January 1, 2020, the beginning of the earliest period presented.

The following summary unaudited pro forma condensed combined balance sheet as of March 31, 2021 combines the audited historical condensed balance sheet of SPNV as of March 31, 2021 with the audited historical consolidated balance sheet of Offerpad as of March 31, 2021, giving effect to the business combination, the PIPE Investment with an aggregate commitment amount of $200.0 million and the transactions contemplated by the SPNV Forward Purchase Agreement, as if they had been consummated as of that date.

The unaudited pro forma condensed combined financial information has been prepared to illustrate the effect of the business combination, the PIPE Investment and the transactions contemplated by the SPNV Forward Purchase Agreement and has been prepared for informational purposes only. The unaudited pro forma condensed combined statement of operations is not necessarily indicative of what the actual results of operations would have been had the business combination taken place on the date indicated, nor are they indicative of the future consolidated results of operations of the post-combination company. The transaction accounting adjustments are based on the information currently available. Actual results may differ materially from the assumptions within the accompanying unaudited pro forma condensed combined financial information.

The unaudited pro forma condensed combined financial information has been prepared using the assumptions below with respect to the potential redemption by SPNV’s public stockholders of shares of SPNV’s public shares for cash equal to their pro rata share of the aggregate amount on deposit (as of two business days prior to the Closing Date) in the Trust Account:

 

   

Assuming No Redemptions: This presentation assumes that no public stockholders of SPNV exercise redemption rights with respect to their public shares for a pro rata share of the funds in the Trust Account.

 

   

Assuming Maximum Redemptions: This presentation assumes that 37,150,000 of SPNV’s public shares are redeemed for an aggregate payment of $371.5 million, which is derived from the number of shares that could be redeemed in connection with the business combination at an assumed redemption price of approximately $10.00 in order for the amount of cash equal to (i)(a) the amount available in the Trust Account at Closing after redemptions, (b) the PIPE Investment amount actually received by SPNV at or prior to the Closing Date, (c) the amount actually received by SPNV at or prior to the Closing Date under the SPNV Forward Purchase Agreements, and (d) any other cash then held by SPNV as of immediately prior to the Closing, less (ii)(a) assumed transaction expenses of SPNV (including deferred underwriting fees) of $31.1 million and (b) assumed SPNV net debt of $0, to be at least equal to $250.0 million. This scenario is based on satisfaction of the Available Closing SPNV Cash condition in the Merger Agreement.


 

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     Pro Forma
Combined
Assuming No
Redemptions
    Pro Forma
Combined
Assuming
Maximum
Redemptions
 
(in thousands)             

Statement of Operations Data — three months ended March 31, 2021

    

Revenue

   $ 283,972     $ 283,972  

Operating expenses

     35,434       35,434  

Loss from operations

     (1,897     (1,897

Interest expense

     1,918       1,918  

Change in fair value of derivative liabilities

     3,822       3,822  

Financing costs - derivative liabilities

     —         —    

Other income, net

     241       241  

Income tax expense

     (13     (13

Net income

     235       235  

Statement of Operations Data — year ended December 31, 2020

    

Revenue

   $ 1,064,257     $ 1,064,257  

Operating expenses

     101,828       101,828  

Loss from operations

     (14,049     (14,049

Interest expense

     (10,031     (10,031

Change in fair value of derivative liabilities

     (16,093     (16,093

Financing costs - derivative liabilities

     (971     (971

Other income, net

     834       834  

Income tax expense

     (168     (168

Net loss

     (40,477     (40,477

Balance Sheet Data — As of March 31, 2021

    

Total current assets

   $ 855,430     $ 483,939  

Total assets

     862,865       491,374  

Total current liabilities

     224,857       224,857  

Total liabilities

     262,609       262,609  

Total stockholder’ equity

     600,256      
228,765
 

 

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COMPARATIVE PER SHARE DATA

The following table sets forth the per share data of each of SPNV and Offerpad on a stand-alone basis and the unaudited pro forma combined per share data for the year ended December 31, 2020 and the three months ended March 31, 2021 after giving effect to the business combination, the PIPE Investment with an aggregate commitment amount of $200.0 million and the transactions contemplated by the SPNV Forward Purchase Agreement, assuming the following in the two pro forma scenarios presented:

 

   

Assuming No Redemptions: This presentation assumes that no public stockholders of SPNV exercise redemption rights with respect to their public shares for a pro rata share of the funds in the Trust Account.

 

   

Assuming Maximum Redemptions: This presentation assumes that 37,150,000 of SPNV’s public shares are redeemed for an aggregate payment of $371.5 million, which is derived from the number of shares that could be redeemed in connection with the business combination at an assumed redemption price of approximately $10.00 in order for the amount of cash equal to (i)(a) the amount available in the Trust Account at Closing after redemptions, (b) the PIPE Investment amount actually received by SPNV at or prior to the Closing Date, (c) the amount actually received by SPNV at or prior to the Closing Date under the SPNV Forward Purchase Agreements, and (d) any other cash then held by SPNV as of immediately prior to the Closing, less (ii)(a) assumed transaction expenses of SPNV (including deferred underwriting fees) of $31.1 million and (b) assumed SPNV net debt of $0, to be at least equal to $250.0 million. This scenario is based on satisfaction of the Available Closing SPNV Cash condition in the Merger Agreement.

The pro forma earnings information for the year ended December 31, 2020 and the three months ended March 31, 2021 was computed as if the business combination, the PIPE Investment and the transactions contemplated by the SPNV Forward Purchase Agreement had been consummated on January 1, 2020, the beginning of the earliest period presented.

The pro forma earnings per share of the combined company is computed by dividing the pro forma net loss available to the combined company’s stockholders by the pro forma weighted-average number of shares of Offerpad Solutions common stock outstanding over the period on a fully diluted net exercise basis.

You should read the information in the following table in conjunction with the summary historical financial information summary included elsewhere in this proxy statement/prospectus, and the historical financial statements of SPNV and Offerpad and related notes that are included elsewhere in this proxy statement/prospectus. The unaudited SPNV and Offerpad pro forma combined per share information is derived from, and should be read in conjunction with, the unaudited pro forma condensed combined financial statements and related notes included elsewhere in this proxy statement/prospectus. See “Unaudited Pro Forma Condensed Combined Financial Information.”


 

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The unaudited pro forma combined earnings per share information below does not purport to represent the earnings per share which would have occurred had the companies been combined during the periods presented, nor earnings per share for any future date or period.

 

    



For the period from

August 31, 2020
(inception) to
December 31, 2020

 

 
 
 

   

For the year ended

December 31, 2020

 

 

    

SPNV

(Historical)

 

 

   

Offerpad

(Historical)

 

 

   


Pro Forma
Combined
(Assuming No
Redemptions)
 
 
 
 
   



Pro Forma
Combined
(Assuming
Maximum
Redemptions)
 
 
 
 
 
   




Offerpad
Equivalent
Per Share
Pro Forma(2)

(Assuming No
Redemptions)

 
 
 
 

 
 

   





Offerpad
Equivalent
Per Share
Pro Forma(2)

(Assuming
Maximum
Redemptions)

 
 
 
 

 
 
 

(in thousands except per share amounts)                          

Net loss

   $ (25,381   $ (23,118   $ (40,477   $ (40,477   $ (40,477   $ (40,477

Weighted average shares outstanding, basic and diluted(1)

     48,124       7,682       273,819       236,670       198,506       198,506  

Basic and diluted net loss per share

   $
(0.53

  $ (3.01   $ (0.15   $ (0.17   $ (0.20   $ (0.20
     For the three months ended
March 31, 2021
(Unaudited)
 
     SPNV
(Historical)
    Offerpad
(Historical)
    Pro Forma
Combined
(Assuming No
Redemptions)
    Pro Forma
Combined
(Assuming
Maximum
Redemptions)
    Offerpad
Equivalent
Per Share
Pro Forma(2)

(Assuming No
Redemptions)
    Offerpad
Equivalent
Per Share
Pro Forma(2)

(Assuming
Maximum
Redemptions)
 
(in thousands except per share amounts)                          

Net income (loss)

   $ 5,165     $ (233   $ 235     $ 235     $ 235     $ 235  

Weighted average shares outstanding, basic(1)

     50,313       7,775       274,224       237,074       198,911       198,911  

Weighted average shares outstanding, diluted(1)

     50,313       7,775       299,607       262,457       224,294       224,294  

Basic net income (loss) per share

   $ 0.10     $ (0.03   $ 0.00     $ 0.00     $ 0.00     $ 0.00  

Diluted net income (loss) per share

   $ 0.10     $ (0.03   $ 0.00     $ 0.00     $ 0.00     $ 0.00  

 

(1)

Shares and the associated amounts have been retroactively restated to reflect the 6-for-7 stock split of the Class B common stock on October 20, 2020, resulting in an aggregate of 10,062,500 shares of Class B common stock outstanding.

(2)

The equivalent pro forma basic and diluted per share data for Offerpad is calculated by multiplying the combined pro forma per share data by the Exchange Ratio set forth in the Merger Agreement.


 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement/prospectus includes statements that express SPNV’s and Offerpad’s opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, “forward-looking statements.” These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “seeks,” “projects,” “intends,” “plans,” “may,” “will” or “should” or, in each case, their negative or other variations or comparable terminology, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this proxy statement/prospectus and include statements regarding our intentions, beliefs or current expectations concerning, among other things, the Transactions, the benefits of the Transactions, including results of operations, financial condition, liquidity, prospects, growth, strategies and the markets in which Offerpad operates. Such forward-looking statements are based on available current market material and management’s expectations, beliefs and forecasts concerning future events impacting SPNV and Offerpad.

Forward-looking statements in this proxy statement/prospectus may include, for example, statements about:

 

   

SPNV’s ability to complete the business combination with Offerpad or, if SPNV does not consummate such business combination, any other initial business combination;

 

   

the satisfaction or waiver (if applicable) of the conditions to the Transactions, including, among other things: (i) approval by SPNV’s and Offerpad’s respective stockholders, (ii) the expiration or termination of the waiting period under the HSR Act, (iii) no order, statute, rule or regulation enjoining or prohibiting the consummation of the Transactions being in force, (iv) SPNV having at least $5,000,001 of net tangible assets as of the Closing, (v) receipt of approval for listing on the NYSE of the shares of SPNV Class A common stock to be issued in connection with the Transactions, (vi) the effectiveness of the registration statement on Form S-4, (vii) the accuracy of the parties’ respective representations and warranties (subject to specified materiality thresholds) and the material performance of the parties’ respective covenants and other obligations and (viii) solely as relates to Offerpad’s obligation to consummate the Transactions, SPNV having at least $250,000,000 of available cash at the Closing;

 

   

the occurrence of any other event, change or other circumstances that could give rise to the termination of the Merger Agreement;

 

   

the projected financial information, anticipated growth rate, and market opportunity of Offerpad;

 

   

the ability to maintain the listing of Offerpad Solutions Class A common stock and warrants on the NYSE following the business combination;

 

   

our public securities’ potential liquidity and trading;

 

   

our ability to raise financing in the future;

 

   

our success in retaining or recruiting, or changes required in, our officers, key employees or directors following the completion of the business combination;

 

   

SPNV officers and directors allocating their time to other businesses and potentially having conflicts of interest with SPNV’s business or in approving the business combination;

 

   

the use of proceeds not held in the trust account or available to us from interest income on the trust account balance;

 

   

factors relating to the business, operations and financial performance of Offerpad, including:

 

   

its ability to respond to general economic conditions;


 

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the health of the U.S. residential real estate industry;

 

   

its ability to grow market share in its existing markets or any new markets it may enter;

 

   

the impact of the COVID-19 pandemic;

 

   

its ability to manage its growth effectively;

 

   

its ability to accurately value and manage inventory, and to maintain an adequate and desirable supply of inventory;

 

   

its ability to successfully launch new product and service offerings, and to manage, develop and refine its technology platform;

 

   

its ability to maintain and enhance its products and brand, and to attract customers;

 

   

its ability to achieve and maintain profitability in the future;

 

   

the success of strategic relationships with third parties; and

 

   

other factors detailed under the section entitled “Risk Factors.”

The forward-looking statements contained in this proxy statement/prospectus are based on SPNV’s and Offerpad’s current expectations and beliefs concerning future developments and their potential effects on the Transactions and Offerpad. There can be no assurance that future developments affecting SPNV or Offerpad will be those that SPNV or Offerpad has anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond either SPNV’s or Offerpad’s control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of the assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. SPNV and Offerpad undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Before any SPNV stockholder grants its proxy or instructs how its vote should be cast or votes on the business combination proposal, the charter proposal, the governance proposal, the incentive plan proposal, the ESPP proposal, the NYSE proposal or the adjournment proposal, it should be aware that the occurrence of the events described in the “Risk Factors” section and elsewhere in this proxy statement/prospectus may adversely affect SPNV and Offerpad.


 

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RISK FACTORS

SPNV stockholders should carefully consider the following risk factors, together with all of the other information included in this proxy statement/prospectus, before they decide whether to vote or instruct their vote to be cast to approve the relevant proposals described in this proxy statement/prospectus.

Unless the context otherwise requires, all references in this subsection to the “Company,” “we,” “us” or “our” refer to the business of Offerpad and its subsidiaries prior to the consummation of the business combination, which will be the business of Offerpad Solutions and its subsidiaries following the consummation of the business combination.

Risks Related to Offerpad’s Business and Industry

Our business and operating results may be significantly impacted by general economic conditions, the health of the U.S. residential real estate industry and risks associated with our real estate assets.

Our success depends, directly and indirectly, on general economic conditions, the health of the U.S. residential real estate industry, particularly the single family home resale market, and risks relating to the ownership of residential real estate, many of which are beyond our control. A number of factors could adversely affect our business, including the following:

 

   

downturns in the U.S. residential real estate market — both seasonal and cyclical — in particular with respect to the single family home resale market and the markets in which we operate;

 

   

changes in national, regional, or local economic, demographic or real estate market conditions;

 

   

the continuing and future impact of the COVID-19 pandemic, including with respect to buying and selling trends in the residential real estate market and potential governmental or regulatory changes or requirements;

 

   

slow economic growth or recessionary or inflationary conditions;

 

   

increased levels of unemployment or declining wages;

 

   

declines in the value of residential real estate or the pace of home appreciation, or the lack thereof;

 

   

illiquidity in residential real estate;

 

   

overall conditions in the housing market, including macroeconomic shifts in demand, and increases in costs for homeowners such as property taxes, homeowners’ association fees and insurance costs;

 

   

low levels of consumer confidence in the economy in general or the U.S. residential real estate industry in particular;

 

   

low home inventory levels or lack of affordably priced homes;

 

   

increased mortgage interest rates or down payment requirements or restrictions on mortgage financing availability;

 

   

changes in household debt levels;

 

   

volatility and general declines in the stock market;

 

   

federal, state, or local legislative or regulatory changes that would negatively impact owners or potential purchasers of single family homes or the residential real estate industry in general, such as the Tax Cuts and Jobs Act of 2017 (the “Tax Act”), which limited deductions of certain mortgage interest expenses and property taxes; or

 

   

natural disasters, such as hurricanes, windstorms, tornadoes, earthquakes, wildfires, floods, hailstorms and other events that disrupt local, regional, or national real estate markets.

 

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Our limited operating history makes it difficult to evaluate our current business and future prospects and the risk of your investment.

Our business model and the technology used in support thereof is still early in its adoption and is difficult to compare to the business models of other market participants in the U.S. residential real estate industry. We launched our first market in 2015 and do not have a long history operating as a commercial company. Our operating results are not predictable and our historical results may not be indicative of our future results. It may be difficult for you to evaluate our potential future performance without the benefit of established long-term track records from companies implementing a similar business model. Few peer companies exist and none have yet established long-term track records that might assist us in predicting whether our business model and strategy can be implemented and sustained over an extended period of time. We may encounter unanticipated problems as we continue to refine our business model and may be forced to make significant changes to our anticipated sales and revenue models to compete with our competitors’ offerings, which may adversely affect our results of operations and profitability.

We operate in a competitive and fragmented industry, and we may not be successful in attracting customers for our products and services, which could harm our business, results of operations and financial condition.

We operate in a competitive and fragmented industry, and we expect competition to continue to increase. We believe that our ability to compete depends upon many factors both within and beyond our control, including the following:

 

   

the financial competitiveness of our products for customers;

 

   

the volume of our customers;

 

   

the timing and market acceptance of our products, including iBuying, and new products offered by us or our competitors;

 

   

our selling and marketing efforts;

 

   

our customer service and support efforts;

 

   

our continued ability to develop and improve our technology to support our business model;

 

   

customer adoption of our platform as an alternative to traditional methods of buying and selling residential real estate; and

 

   

our brand strength relative to our competitors.

Our business model depends on our ability to continue to attract customers to our digital platform and the products and services we offer, and enhance their engagement with our products in a cost-effective manner. New entrants continue to join our market categories. Our existing and potential competitors include companies that operate, or could develop, national or local real estate businesses offering services, including real estate brokerage services, mortgage, and title insurance and escrow services, to home buyers or sellers.

Many of our competitors have well-established national reputations and may market similar products and services. Several of these companies are larger than us and have significant competitive advantages, including better name recognition, higher financial ratings, greater resources, lower cost of funds and additional access to capital, and more types of offerings than we currently do. These companies may also have higher risk tolerances or different risk assessments than we do. In addition, these competitors could devote greater financial, technical and other resources than we have available to develop, grow or improve their businesses. If we are not able to continue to attract customers to our platform, products and services and achieve greater scale in operations, our business, results of operations and financial condition will be harmed.

 

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The COVID-19 pandemic and attempts to contain it have adversely impacted our business, results of operations and financial condition, and it may continue to adversely impact our business, results of operations and financial condition in the future.

Our success depends on a high volume of residential real estate transactions throughout the markets in which we operate. This transaction volume affects all of the ways that we generate revenue, including our ability to acquire new homes and generate associated fees and our ability to sell homes that we own. The COVID-19 pandemic has significantly and adversely affected, and may continue to significantly and adversely affect, residential real estate transaction volume. For example, beginning in late March 2020, governmental authorities put in place limitations on in-person activities related to the sale of residential real estate in the markets in which we operate, although these limitations became less stringent in the second quarter of 2020. As a result, we decreased acquisitions of home inventory and decreased the volume of home inventory on our platform. We sold 4,281 homes in the year ended December 31, 2020, compared to 4,680 homes in the year ended December 31, 2019, representing a decrease of 9%, and decreased our inventory from $343.6 million as of December 31, 2019 to $171.4 million as of December 31, 2020. Our inventory as of March 31, 2021 was $220.0 million. We cannot assure you of the long-term impact governmental measures may have on the growth of our business.

We believe that COVID-19’s impact on our transaction volume depends in part on the impact of current and potential limitations imposed by governmental authorities on processes and procedures attendant to residential real estate transactions, such as home inspections and appraisals and in-person showings and county recordings, as well as COVID-19’s overall impacts on the U.S. economy. We believe that consumer spending on real estate transactions may be adversely affected by a number of macroeconomic factors related to COVID-19, including but not limited to:

 

   

increased unemployment rates and stagnant or declining wages;

 

   

decreased consumer confidence in the economy and recessionary conditions;

 

   

volatility and declines in the stock market and lower yields on individuals’ investment portfolios; and

 

   

more stringent mortgage financing conditions, including increased down payment requirements.

We have experienced rapid growth since inception, which may not be indicative of our future growth, and, if we continue to grow rapidly, we may experience difficulties in managing our growth effectively and expanding our operations and service offerings.

We have experienced rapid growth and demand for our products and service offerings since inception. We expect that, in the future, even if our revenue increases, our rate of growth may decline. In any event, we will not be able to grow as fast or at all if we do not, among other things:

 

   

increase the number of customers using our platform;

 

   

acquire sufficient inventory at an attractive cost and quality to meet the increasing demand for our homes;

 

   

successfully turn inventory in an efficient manner;

 

   

increase customer conversion;

 

   

increase our market share within existing markets and expand into new markets;

 

   

increase our brand awareness;

 

   

obtain and retain adequate availability of financing sources; and

 

   

obtain necessary capital to meet our business objectives.

Furthermore, in order to preserve our market position, we intend to expand into new markets and launch new products or services in existing or new markets more quickly than we would if we did not operate in such a

 

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highly competitive industry. Expanding into new markets may prove to be challenging, as some markets may have very different characteristics than the markets we currently operate in, some of which may be unanticipated or unknown to us. These differences may result in greater pricing inaccuracies, as well as higher capital requirements, inventory hold times, repair costs and transaction costs that may result in those markets being less profitable for us than the ones in which we currently operate.

We have had a history of losses since our inception, and we may not achieve or maintain profitability in the future.

We have had a history of losses since our inception. We incurred net losses of $52.0 million and $23.1 million for the years ended December 31, 2019 and 2020, respectively, and a net loss of $0.2 million for the three months ended March 31, 2021. We had an accumulated deficit of $138.5 million and $138.7 million as of December 31, 2020 and March 31, 2021, respectively. We expect to continue to make future investments in developing and expanding our business, including technology, recruitment and training, marketing, and pursuing strategic opportunities. These investments may not result in increased revenue or growth in our business. Additionally, we may incur significant losses in the future for a number of reasons, including:

 

   

our inability to grow market share in our existing markets or any new markets we may enter;

 

   

our expansion into new markets;

 

   

declines in U.S. residential real estate transaction volumes;

 

   

increased competition in the U.S. residential real estate industry;

 

   

changes in our fee structure or rates;

 

   

our failure to accurately price homes we acquire or changes to resale prices during the time homes are in inventory;

 

   

our failure to realize anticipated efficiencies through our technology and business model;

 

   

costs associated with enhancements, or new offerings of our products and services;

 

   

failure to execute our growth strategies;

 

   

increased marketing costs;

 

   

lack of access to housing market data that is used in our pricing models at reasonable cost;

 

   

hiring additional personnel to support our overall growth;

 

   

loss in value of real estate or potential impairments in the value of our assets due to changes in market conditions in the area in which real estate or assets are located;

 

   

increases in costs associated with holding our real estate inventories, including financing costs;

 

   

the availability of debt financing and securitization funding to finance our real estate inventories; and

 

   

unforeseen expenses, difficulties, complications and delays, and other unknown factors.

Accordingly, we may not be able to achieve or maintain profitability and we may continue to incur significant losses in the future. Moreover, as we continue to invest in our business, we expect expenses to continue to increase in the near term. These investments may not result in increased revenue or growth in our business. If we fail to manage our losses or to grow our revenue sufficiently to keep pace with our investments and other expenses, our business will be harmed and it may also impact our access to funding and liquidity sources. In addition, as a public company, we will also incur significant legal, accounting and other expenses that we did not incur as a private company.

Because we incur substantial costs and expenses from our growth efforts before we receive any incremental revenues with respect to those investments, we may find that these efforts are more expensive than we currently

 

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anticipate or that these efforts may not result in an increase in revenues to offset these expenses, which would further increase our losses, and which could have a material adverse effect on our business and financial condition.

Our business is dependent upon our ability to accurately value and manage inventory and an ineffective pricing or portfolio management strategy may have an adverse effect on our business, sales and results of operations.

We appraise and price the homes we buy and sell using in-house proprietary data analytics technology, which continuously collects and synthesizes market data with performance history from our real estate operations, forming a knowledge distillation and feedback loop along the process and enabling us to operate a highly intelligent and automated workflow. This assessment includes estimates on time of possession, market conditions, renovation and holding costs, and anticipated resale proceeds. Conversion rates and customer satisfaction may be negatively impacted if valuations are too low and/or fees are too high. Additionally, following our acquisition of a home, we may need to decrease our anticipated resale price for that home if we discover defects or other conditions requiring remediation or impacting the value of the home that were unknown to us at the time of acquisition. Moreover, these risks may be heightened when we expand into new markets where we may not have similar levels of knowledge and experience as we do in the markets we currently operate. As a result of these factors, we may be unable to acquire or sell inventory at attractive prices or to finance and manage inventory effectively, and accordingly our revenue, gross margins and results of operations would be affected, which could have a material adverse effect on our business, financial condition and results of operations.

Prospective sellers and buyers of homes may choose not to transact online, which could harm our growth prospects.

Our success depends on our ability to attract customers who have historically purchased homes through more traditional channels. The online market for homes is significantly less developed than the online market for other goods and services in industries such as commerce, healthcare, insurance, books, music, travel and other consumer products and account for only 1% of total annual U.S. residential real estate transactions. If this market does not gain widespread acceptance, our business will suffer. Furthermore, we may have to incur significantly higher and more sustained advertising and promotional expenditures or offer more incentives than we currently anticipate in order to attract consumers to our platform and convert them into sellers or buyers. If the online market for residential real estate does not continue to develop and grow, our business will not grow and our business, financial condition and results of operations would be materially and adversely affected.

Declining real estate valuations could result in recording impairment charges, and property values may decline between our offer to purchase a home and the closing of such home, which could adversely affect our financial condition and operating results.

We are subject to risks inherent to declines in real estate valuations. For example, home prices can be volatile, and the values of our inventory may fluctuate significantly and we may incur impairment charges due to changes in market conditions or economic sentiment. We periodically review the value of our properties to determine whether their value, based on market factors and generally accepted accounting principles, has permanently decreased such that it is necessary or appropriate to take an impairment loss in the relevant accounting period. Such a loss would cause an immediate reduction of net income in the applicable accounting period and would be reflected in a decrease in our balance sheet assets. Even if we do not determine that it is necessary or appropriate to record an impairment loss, a reduction in the intrinsic value of a property would become manifest over time through reduced income from the property as evidenced by its resale value and would therefore affect our earnings and financial condition.

Additionally, the time between an offer to purchase a home and the closing of such transaction can vary from weeks to several months, depending on the needs of our customers. In the interim period, there can be adverse

 

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impacts on the value or liquidity profile of the home. We may not be able to or wish to renegotiate or cancel a contract because doing so would negatively impact customer satisfaction and our brand, and potentially subject us to loss of our earnest money deposit or litigation. In the event the value of such homes declines significantly, we could experience losses, which in the aggregate could be detrimental to our business and results of operations.

Our business is dependent upon our ability to expeditiously sell inventory. Failure to expeditiously sell our inventory could have an adverse effect on our business, sales and results of operations. Holding homes in inventory exposes us to risks, such as increased holding costs and the risks of declining real estate valuations.

Our purchases of homes are based in large part on our estimates of projected demand. If actual sales are materially less than our forecasts, we would experience an over-supply of inventory. An over-supply of home inventory will generally cause downward pressure on our sales prices and margins and increase our average days to sale. Our inventory of homes purchased has typically represented a significant portion of total assets. Having such a large portion of our total assets in the form of non-income producing homes inventory for an extended period of time subjects us to significant holding costs, including financing expenses, maintenance and upkeep expenses, insurance expenses, property tax expenses, homeowners’ association fees, utility fees and other expenses that accompany the ownership of residential real property and increased risk of depreciation of value, in addition to risks related to declining real estate valuations. If we have excess inventory or our average days to sale increases, the results of our operations may be adversely affected because we may be unable to liquidate such inventory at prices that allow us to meet margin targets or to recover our costs.

Our business is concentrated in certain geographic markets, and local or regional conditions, including economic downturns, severe weather, catastrophic occurrences or other disruptions or events may materially adversely affect our financial condition and results of operations.

While our business is spread across 16 markets in the United States, a substantial amount of our revenue is generated in certain geographic markets. For the year ended December 31, 2020 and the three months ended March 31, 2021, approximately 67% and 71% of our revenue, respectively, was generated from our top five markets by revenue, which consisted of Atlanta, Charlotte, Dallas, Phoenix and Tampa. As a result of this concentration, local and regional conditions in these markets – including those arising from COVID-19’s impacts – may differ significantly from prevailing conditions in the United States or other parts of the country. Any unforeseen events or circumstances that negatively affect these areas could materially adversely affect our revenues and profitability. These risks include possible declines in the value of real estate; risks related to general and local economic conditions; demographic and population shifts and migration; possible lack of availability of mortgage funds; overbuilding; extended vacancies of properties; increases in competition, property taxes and operating expenses; changes in zoning laws; increased labor costs; unemployment; costs resulting from the clean-up of, and liability to third parties for damages resulting from, environmental problems; casualty or condemnation losses; and uninsured damages from floods, hurricanes, earthquakes or other natural disasters.

In addition, our top markets are primarily larger metropolitan areas, where home prices and transaction volumes are generally higher than other markets in the United States. To the extent people migrate outside of these markets due to lower home prices or other factors, and this migration continues to take place over the long-term, then the relative percentage of residential housing transactions may shift away from our historical top markets where we have generated most of our revenue. If we are unable to effectively adapt to any shift, including failing to increase revenue from other markets, then our financial performance may be harmed.

We may be unsuccessful in launching new product and service offerings or pursuing expansion of existing product and service offerings into new markets, which could result in significant expense and may not achieve the desired results.

We regularly evaluate expanding our products into new markets or launching new service offerings in existing or new markets and plan to expand our markets significantly through the end of 2023. Any expansion or new

 

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offering requires significant expenses and the time of our key personnel, particularly at the outset of the process, and our new service offerings, and expansion of our Flex platform may not result in the customer conversion or profitability that we expect. We typically experience increased losses in new markets as we adjust to competitive environments with which we are unfamiliar and invest to build our brand presence within those markets. Our plans to expand and deepen our market share in our existing markets and expand into additional markets are subject to a variety of risks and challenges. These risks and challenges include the varying economic and demographic conditions of each market, competition from local and regional residential brokerage firms, variations in transaction dynamics, and pricing pressures. We cannot assure you that we will be able to increase revenues and create business model efficiencies in new markets in the manner we have in our more mature existing markets.

Housing markets and housing stock in different areas can vary widely and certain markets may be more adaptable to our current business model than others. As we continue to expand, we may launch our products or services in markets that prove to be more challenging for our business model. As we expand from markets with a relatively new and homogeneous housing stock to markets with older and more diverse housing stock, we will have to adapt our business and operations to local conditions. The valuation technologies and systems that we currently use may not be as effective at accurately valuing homes in markets with older and more diverse housing stock. In addition, homes that we purchase in markets with relatively older housing stock may require more capital expenditures on improvements and repairs. We may also expand into markets with higher average home prices and fewer available homes within our target price range. If we are unable to adapt to these new markets and scale effectively, our business and results of operations may be adversely affected.

New markets and new product or service offerings may also subject us to new regulatory environments, which could increase our costs as we evaluate compliance with the new regulatory regime. Notwithstanding the expenses and time devoted to expanding an existing product or service offering into a new market or launching a new product offering, we may fail to achieve the financial and market share goals associated with the expansion. If we cannot manage our expansion efforts efficiently, our market share gains could take longer than planned and our related costs could exceed our expectations. In addition, we could incur significant costs to seek to expand our market share, and still not succeed in attracting sufficient customers to offset such costs.

Our business model and growth strategy depend on our marketing efforts and ability to maintain our brand and attract customers to our platform in a cost-effective manner.

Our long-term success depends in part on our ability to continue to attract more buyers and sellers to our platform in each of our markets. We believe that an important component of our growth will be increased traffic to, and use of, our website and mobile application by potential customers. Our marketing efforts may not succeed for a variety of reasons, including changes to search engine algorithms, ineffective campaigns across marketing channels, limited experience in new marketing channels and any technical difficulties customers may experience using our applications. External factors beyond our control may also affect the success of our marketing initiatives, such as filtering of our targeted communications by email servers, buyers and sellers failing to respond to our marketing initiatives, and competition from third parties. Any of these factors could reduce the number of customers coming to our platform. Our business model relies on our ability to scale rapidly and to decrease incremental customer acquisition costs as we grow. If we are unable to recover our marketing costs through increases in customer traffic and in the number of transactions by users of our platform, or if our broad marketing campaigns are not successful or are terminated, it could have a material adverse effect on our growth, results of operations and financial condition.

We also believe that the brand identity that we have developed is a significant factor in the success of our business, and maintaining and enhancing the “Offerpad” brand is critical to maintaining and expanding our customer base and current and future partners. Failure to promote or maintain our brand, or incurring excessive costs in this effort, could adversely affect our business, operating results and financial condition.

 

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Reductions in the availability of mortgage financing provided by government agencies, changes in government financing programs or an increase in mortgage interest rates could decrease our customers’ ability or desire to obtain financing and adversely affect our business or financial results.

The secondary market for mortgage loans continues to primarily desire securities backed by Fannie Mae, Freddie Mac or Ginnie Mae, and we believe the liquidity these agencies provide to the mortgage industry is important to the housing market. Any significant change regarding the long-term structure and viability of Fannie Mae and Freddie Mac could result in adjustments to the size of their loan portfolios and to guidelines for their loan products. Moreover, as we expand into higher cost markets or target higher-priced homes, home buyers, and accordingly demand for our homes and services, may be more acutely affected by these factors. Additionally, a reduction in the availability of financing provided by these institutions could adversely affect interest rates, mortgage availability and sales of new homes and mortgage loans.

Mortgage interest rates are currently low when compared to most historical periods and could increase in the future, particularly if the Federal Reserve Board raises its benchmark rate. Moreover, mortgage financing is relatively available compared to most historical periods. When interest rates increase, the cost of owning a home increases, which will likely reduce the number of potential home buyers who can obtain mortgage financing and affect the prices home buyers may be willing to pay for homes. If mortgage financing otherwise is less available to home buyers either due to an increase in interest rates or a general tightening of credit conditions, it could result in a decline in the demand for our homes and the services offered by our platform.

The residential real estate market is subject to seasonality, and our operating results are likely to fluctuate on a quarterly and annual basis.

We expect our revenue and results of operations to vary significantly from period to period in the future, based in part on, among other things, consumers’ home buying patterns. The residential real estate market is seasonal, with greater demand from home buyers in the spring and summer, and typically weaker demand in late fall and winter, resulting in fluctuations in the quantity, speed and price of transactions on our platform. 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 to date.

If we do not innovate or provide customers with an efficient and seamless transaction experience, our business could be harmed.

The industry for residential real estate transaction services, technology, information marketplaces and advertising is dynamic, and the expectations and behaviors of customers and professionals shift constantly and rapidly. Our success depends on our continued innovation to provide new, and improve upon existing, products and services that make real estate transactions faster, easier and less stressful for our customers. The success of our business may also depend on our ability to successfully integrate additional ancillary services into our platform, including renovation, insurance and home warranty services. As a result, we must continually invest significant resources in research and development to improve the attractiveness and comprehensiveness of our products or services, enable smoother and more efficient real estate transactions, adapt to changes in technology and support new devices and operating systems. Changes or additions to our products or services may not attract or engage our customers, and may reduce confidence in our products or services, negatively impact the quality of our brand, upset other industry participants, expose us to increased market or legal risks, subject us to new laws and regulations or otherwise harm our business. Furthermore, if we are unable to successfully anticipate or keep pace with industry changes and provide products or services that our customers want to use, on the devices they prefer, then those customers may become dissatisfied and use our competitors instead. If we are unable to continue offering high-quality, innovative products, we may be unable to attract additional customers and real estate partners or retain our current customers and real estate partners, which could harm our business, results of operations and financial condition.

 

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A significant portion of our costs and expenses are fixed, and we may not be able to adapt our cost structure to offset declines in our revenue.

A significant portion of our expenses are fixed and do not vary proportionately with fluctuations in revenues. We need to maintain and continue to increase our transaction volumes to benefit from operating efficiencies. When we operate at less than expected capacity, fixed costs are inflated and represent a larger percentage of overall cost basis and percentage of revenue. Certain services we use, subscriptions and fees have fixed costs and are necessary for operation of the business. The other portion of fixed costs are necessary in order to invest in future growth. Given the early stage of our business, we cannot assure you that we will be able to rationalize our fixed costs.

Our growth depends in part on the success of our strategic relationships with third parties.

In order to grow our business, we anticipate that we will continue to depend on relationships with third parties, such as settlement service providers, lenders, real estate agents, valuation companies, vendors we use to renovate, service or repair our homes, third party partners we rely on for referrals, such as homebuilders and online real estate websites or institutional buyers of our inventory. Identifying partners, and negotiating and documenting agreements with them, and establishing and maintaining good relationships requires significant time and resources.

In addition, we rely on our relationships with multiple-listing services providers (“MLS”) in all our markets both as key data sources for our pricing and for listing our inventory for resale. Many of our competitors and other real estate websites have similar access to MLSs and listing data and may be able to source real estate information faster or more efficiently than we can. If we lose existing relationships with MLSs and other listing providers, whether due to termination of agreements or otherwise, changes to our rights to use or timely access listing data, an inability to continue to add new listing providers or changes to the way real estate information is shared, our ability to price or list our inventory for resale could be impaired and our operating results may suffer.

If we are unsuccessful in establishing or maintaining successful relationships with third parties, our ability to compete in the marketplace or to grow our revenues could be impaired and our operating results may suffer. Even if we are successful, we cannot assure you that these relationships will result in increased customer usage of our product or increased revenues.

If the methodologies we use to assess the value and condition of homes are inaccurate, including because of the information supplied to us by prospective sellers or due to the physical inspections being ineffective, it could result in unforeseen costs and risks.

We make offers based in part on our assessment of offer requests completed by the prospective seller. While we may seek to confirm or supplement the information provided in such an offer request through our own due diligence, including physical inspections, we may rely on the information supplied to us by prospective sellers to make offer decisions, and we cannot be certain that this information is accurate. If owner-supplied information is inaccurate, we may make poor or imperfect pricing decisions and our portfolio may contain more risk than we believe. We also may conduct physical inspections of homes remotely through videos submitted to us by the sellers and this shift has been accelerated by health concerns associated with COVID-19, and this change may become permanent. It is possible that these video inspections may not be effective in identifying undisclosed issues, conditions or defects that an in-person inspection might otherwise reveal, which could result in us incurring unforeseen costs during the resale process.

Our business is dependent upon an adequate and desirable supply of inventory, which is impacted by many factors. Any inability to acquire sufficient or desirable inventory may adversely effect on our business, sales and results of operations.

We primarily acquire homes directly from consumers and there can be no assurance of an adequate or desirable supply of such homes on terms that are attractive to us. A reduction in the availability of or access to inventory

 

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could adversely affect our business, sales and results of operations. Additionally, we evaluate thousands of potential homes daily using our proprietary pricing model. If we fail to adjust our pricing to stay in line with broader market trends, or fail to recognize those trends, it could adversely affect our ability to acquire inventory. We remain dependent on customers to sell us homes.

Our ongoing ability to acquire homes is critical to our business model. A lack of available or desirable homes that meet our purchase criteria may affect our ability to scale. Reductions in our acquisitions of homes may have adverse effects on our ability to reach our desired inventory levels, our desired portfolio diversification and our results of operations. In response to the COVID-19 pandemic and the consequent health risks, we ceased purchasing additional homes in March and April 2020 to safeguard the health and safety of our customers and employees. We continued to sell down inventory throughout 2020, leading to inventory of $171.4 million as of December 31, 2020 compared to inventory of $343.6 million as of December 31, 2019. Our inventory as of March 31, 2021 was $220.0 million. As our revenues are dependent on inventory levels available for sale, we expect our near-term revenues to be impacted due to limited inventory.

Increases in transaction costs to acquire properties, including costs of evaluating homes and making offers, title insurance and escrow service costs, changes in transfer taxes, and any other new or increased acquisition costs, would have an adverse impact on our home acquisitions and our business.

Our ability to compete effectively and execute on our strategic plan depends in part on our ability to manage home renovations.

Our business depends, in part, upon our ability to effectively manage home renovations. We typically renovate or repair homes prior to listing them for resale. We use internal employees and use third parties to renovate and repair homes before we resell them.

We or these third-party providers may not be able to complete the required renovations or repairs within the expected timeline or proposed budget. Furthermore, if the work quality of our employees or third-party providers does not meet our expectations, then we may need to engage another third-party contractor or subcontractor, which may also adversely affect the timeline or budget for completing renovations or repairs.

A longer than expected period for completing renovations or repairs could negatively impact our ability to sell a home within our anticipated timeline. This prolonged timing exposes us to factors that adversely affect the home’s resale value and may result in selling the home for a lower price than anticipated or not being able to sell the home at all. Meanwhile, incurring more than budgeted costs would adversely affect our investment return on purchased homes. Additionally, any undetected issues with a third-party provider’s work may adversely affect our reputation as a home seller.

There are risks related to our ownership of vacant homes and the listing of those homes for resale that are not possible to fully eliminate.

The homes in our inventory generally are not occupied during the time we own them prior to resale. When a home is listed for resale, prospective buyers or their agents typically can access our homes instantly through our technology without the need for an appointment or one of our representatives being present. In certain circumstances, we also allow sellers to continue to occupy a home after we have purchased the home for a short period of time. Having visitors or short-term occupants in our homes entails risks of damage to the homes, personal injury, unauthorized activities on the properties, theft, rental scams, squatters and trespassers and other situations that may have adverse impacts on us or the homes, including potential adverse reputational impacts. Additionally, all of these circumstances may involve significant costs to resolve that may not be fully covered by insurance, including legal costs associated with removing unauthorized visitors and occupants and additional holding and repair costs. If these increased costs are significant across our homes inventory, both in terms of costs per home and numbers of homes impacted, this could have an adverse impact on our results of operations that is material.

 

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Since we employ real estate agents for our brokerage business, we are subject to challenges that may not be faced by our competitors. Our ability to hire and retain a sufficient number of agents is critical to maintaining and growing our business and providing an adequate level of service to our customers.

As a result of our business model of employing real estate agents for our brokerage business, our real estate agents generally earn less on a per transaction basis than traditional real estate agents who work as independent contractors at traditional brokerages. Because our model is uncommon in our industry, real estate agents considering working for us may not understand our compensation model or may not perceive it to be more attractive than the independent contractor, commission-driven compensation model used by most traditional brokerages. If we are unable to attract, retain, effectively train, motivate, and utilize our real estate agents, we will be unable to grow our business and we may be required to change our compensation model, which could significantly increase our real estate agent compensation or other costs.

Also as a result of employing our real estate agents, we incur costs that our brokerage competitors do not, such as base pay, employee benefits, expense reimbursement, training, and employee transactional support staff. As a result, we have significant costs that, in the event of downturns in demand in the markets we serve, may result in us being unable to adjust as rapidly as some of our competitors. In turn, such downturns may impact us more than our competitors.

Conversely, in times of rapidly rising demand we may face a shortfall of real estate agents. To the extent our customer demand increases from current levels, our ability to adequately serve the additional customers, and in turn grow our revenue and market share, depends, in part, on our ability to timely hire and retain additional real estate agents. To the extent we are unable to hire, either timely or at all, or retain the required number of real estate agents to serve our customer demand, we will be unable to maximize our revenue and market share growth.

Additionally, due to the costs of employing our real estate agents, real estate agent turnover may be more costly to us than to traditional brokerages. Our business may be harmed if we are unable to achieve the necessary level of real estate agent productivity and retention to offset their related costs.

We are subject to the requirements governing the licensing and conduct of real estate brokerage and brokerage-related businesses in the jurisdictions in which we do business.

Due to our brokerage business, we and our agents must comply with the requirements governing the licensing and conduct of real estate brokerage and brokerage-related businesses in the markets in which we operate. Due to the geographic scope of our operations, we and our real estate agents may not be in compliance with all of the required licenses at all times. Additionally, if we enter into new markets, we may become subject to additional licensing requirements. If we or our real estate agents fail to obtain or maintain the required licenses for conducting our brokerage operations or fail to strictly adhere to associated regulations, the relevant government authorities may order us to suspend relevant operations or impose fines or other penalties.

A health and safety incident relating to our operations could be costly in terms of potential liability and reputational damage.

Customers will visit homes on a regular basis through our mobile application or with a real estate agent. Due to the number of homes we own, the safety of our homes is critical to the success of our business. A failure to keep our homes safe that results in a major or significant health and safety incident could expose us to liability that could be costly. Such an incident could generate significant negative publicity and have a corresponding impact on our reputation, our relationships with relevant regulatory agencies or governmental authorities, and our ability to attract customers and employees, which in turn could have a material adverse effect on our financial results and liquidity.

 

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Our risk management efforts may not be effective.

We could incur substantial losses and our business operations could be disrupted if we are unable to effectively identify, manage, monitor and mitigate financial risks, such as pricing risk, interest rate risk, liquidity risk, and other market-related risks, as well as operational and legal risks related to our business, assets and liabilities. We also are subject to various laws, regulations and rules that are not industry specific, including employment laws related to employee hiring and termination practices, health and safety laws, environmental laws and other federal, state and local laws, regulations and rules in the jurisdictions in which we operate. Our risk management policies, procedures, and techniques may not be sufficient to identify all of the risks to which we are exposed, mitigate the risks we have identified, or identify additional risks to which we may become subject in the future. Expansion of our business activities may also result in our being exposed to risks to which we have not previously been exposed or may increase our exposure to certain types of risks, and we may not effectively identify, manage, monitor, and mitigate these risks as our business activities change or increase.

We are from time to time involved in, or may in the future be subject to, claims, suits, government investigations, and other proceedings that may result in adverse outcomes.

We are from time to time involved in, or may in the future be subject to, claims, suits, government investigations, and proceedings arising from our business, including actions with respect to intellectual property, privacy, consumer protection, information security, mortgage lending, real estate, environmental, data protection or law enforcement matters, tax matters, labor and employment, and commercial claims, as well as actions involving content generated by our customers, shareholder derivative actions, purported class action lawsuits, and other matters. Such claims, suits, government investigations, and proceedings are inherently uncertain, and their results cannot be predicted with certainty. Regardless of the outcome, any such legal proceedings can have an adverse impact on us because of legal costs, diversion of management and other personnel, negative publicity and other factors. In addition, it is possible that a resolution of one or more such proceedings could result in reputational harm, liability, penalties, or sanctions, as well as judgments, consent decrees, or orders preventing us from offering certain features, functionalities, products, or services, or requiring a change in our business practices, products, services or technologies, which could in the future materially and adversely affect our business, operating results and financial condition.

We operate in a highly regulated industry and are subject to a wide range of federal, state and local laws, rules and regulations. Failure to comply with these laws, rules and regulations or to obtain and maintain required licenses, could adversely affect our business, financial condition and results of operations.

We operate in highly regulated businesses through a number of different channels across the United States. As a result, we are currently subject to a variety of, and may in the future become subject to additional, federal, state and local statutes and regulations in various jurisdictions (as well as judicial and administrative decisions and state common law), which are subject to change at any time, including laws regarding the real estate and mortgage industries, settlement services, insurance, mobile and internet-based businesses and other businesses that rely on advertising, as well as data privacy and consumer protection laws, and employment laws. These laws are complex and sometimes ambiguous, and can be costly to comply with, require significant management time and effort, require a substantial investment in technology, and subject us to claims, government enforcement actions, civil and criminal liability or other remedies, including suspension of business operations.

Buying and selling homes, providing real estate brokerage services, and provide other product offerings, such as mortgage brokerage services, results in us receiving or facilitating transmission of personally identifiable information. Further, in the future we may offer additional products and services, which could increase the amount of personally identifiable information we receive and transmit. This information is increasingly subject to legislation and regulation in the United States. These laws and regulations are generally intended to protect the privacy and security of personal information, including Social Security Numbers that is collected, processed and transmitted. These laws also can restrict our use of this personal information for other commercial purposes. We

 

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could be adversely affected if government regulations require us to significantly change our business practices with respect to this type of information, if penetration of network security or misuse of personal information occurs, or if the third parties that we engage with to provide processing and screening services violate applicable laws and regulations, misuse information, or experience network security breaches.

In order to provide the broad range of products and services that we offer or plan to offer customers, certain of our subsidiaries are or will be required to maintain real estate brokerage and mortgage licenses in certain states in which we operate. These entities are subject to stringent state and federal laws and regulations and to the scrutiny of state and federal government agencies as licensed businesses.

Mortgage products are regulated at the state level by licensing authorities and administrative agencies, with additional oversight from the Consumer Financial Protection Bureau and other federal agencies. These laws generally regulate the manner in which lending and lending-related activities are marketed or made available to consumers, including, but not limited to, advertising, finding and qualifying applicants, the provision of consumer disclosures, payments for services, and record keeping requirements; these laws include, at the federal level, the Real Estate Settlement Procedures Act, the Fair Credit Reporting Act (as amended by the Fair and Accurate Credit Transactions Act), the Truth in Lending Act (including the Home Ownership and Equity Protection Act of 1994), the Equal Credit Opportunity Act, the Fair Housing Act, the Gramm-Leach-Bliley Act, the Electronic Fund Transfer Act, the Servicemembers Civil Relief Act, the Military Lending Act, the Homeowners Protection Act, the Home Mortgage Disclosure Act, the Secure and Fair Enforcement for Mortgage Licensing Act of 2008, the Federal Trade Commission Act, the Dodd Frank Wall Street Reform and Consumer Protection Act of 2010, the Bank Secrecy Act (including the Office of Foreign Assets Control and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act), the Telephone Consumer Protection Act, the Mortgage Acts and Practices Advertising Rule (Regulation N), the Coronavirus Aid, Relief, and Economic Security Act, all implementing regulations, and various other federal laws. The Consumer Financial Protection Bureau also has broad authority to enforce prohibitions on practices that it deems to be unfair, deceptive or abusive. Additionally, state and local laws may restrict the amount and nature of interest and fees that may be charged by a lender or mortgage broker, impose more stringent privacy requirements and protections for service members, and/or otherwise regulate the manner in which lenders or mortgage brokers operate or advertise.

As a provider of real estate brokerage services, we hold real estate brokerage licenses in multiple states and may apply for additional real estate brokerage licenses as our business grows. To maintain these licenses, we must comply with the requirements governing the licensing and conduct of real estate brokerage services and brokerage-related businesses in the markets where we operate. We may be subject to additional local, state and federal laws and regulations governing residential real estate transactions, including those administered by the U.S. Department of Housing and Urban Development, and the states and municipalities in which we transact. Further, due to the geographic scope of our operations and the nature of the products and services we provide, certain of our other subsidiaries maintain real estate brokerage licenses in certain states in which we operate. Each of these licenses subjects our subsidiaries to different federal, state, and local laws and the scrutiny of different licensing authorities, including state insurance departments. Each subsidiary must comply with different licensing statutes and regulations, as well as varied laws that govern the offering of compliant products and services.

For certain licenses, we are required to designate individual licensed brokers of record, qualified individuals and control persons. Certain licensed entities also are subject to routine examination and monitoring by the federal Consumer Financial Protection Bureau (for mortgage) and/or state licensing authorities. We cannot assure you that we, or our licensed personnel, are and will remain at all times, in full compliance with state and federal real estate, title insurance and escrow, property and casualty insurance, and mortgage licensing and consumer protection laws and regulations, and we may be subject to litigation, government investigations and enforcement actions, fines or other penalties in the event of any non-compliance. As a result of findings from examinations, we also may be required to take a number of corrective actions, including modifying business practices and

 

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making refunds of fees or money earned. In addition, adverse findings in one state may be relied on by another state to conduct investigations and impose remedies. If we apply for new licenses, we will become subject to additional licensing requirements, which we may not be in compliance with at all times. If in the future a state agency were to determine that we are required to obtain additional licenses in that state in order to operate our business, or if we lose or do not renew an existing license or are otherwise found to be in violation of a law or regulation, we may be subject to fines or legal penalties, lawsuits, enforcement actions, void contracts, or our business operations in that state may be suspended or prohibited. Our business reputation with consumers and third parties also could be damaged. Compliance with, and monitoring of, these laws and regulations is complicated and costly and may inhibit our ability to innovate or grow.

If we are unable to comply with these laws or regulations in a cost-effective manner, it may require us to modify certain products and services, which could require a substantial investment and result in a loss of revenue, limit our ability to offer additional products and services, or expand existing products and services into new markets, or cease providing the impacted product or service altogether. Furthermore, laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our products and business.

Catastrophic events may disrupt our business.

Natural disasters or other catastrophic events may cause damage or disruption to our operations, real estate commerce, and the global economy, and thus could harm our business. In particular, the COVID-19 pandemic, including the reactions of governments, markets, and the general public to the COVID-19 pandemic, may result in a number of adverse consequences for our business and results of operations, the details of which would be difficult to predict. Properties located in the markets in which we operate in Florida and certain portions of North Carolina and Texas are more susceptible to certain hazards (such as floods, hurricanes or hail) than properties in other parts of the country.

In the event of a major earthquake, hurricane, windstorm, tornado, flood or catastrophic event such as pandemic, fire, flood, power loss, telecommunications failure, cyber-attack, war, or terrorist attack, we may be unable to continue our operations and may endure reputational harm, delays in developing our platform and solutions, breaches of data security and loss of critical data, all of which could harm our business, results of operations and financial condition. Furthermore, these sorts of catastrophic events may cause disruption on both the resale and acquisition side as we may not be able to transact on real estate. For example, homes that we own may be damaged and disruptions to infrastructure may mean our contractors are unable to perform the necessary home repairs in a timely manner. Closures of local recording offices or other governmental offices in charge of real property records, including tax or lien-related records, would adversely affect our ability to conduct operations in the affected geographies. Any of these delays will likely result in extended hold times, increased costs and impairments. Also, the insurance we maintain would likely not be adequate to cover our losses resulting from disasters or other business interruptions.

As we grow our business, the need for business continuity planning and disaster recovery plans will grow in significance. If we are unable to develop adequate plans to ensure that our business functions continue to operate during and after a disaster, and successfully execute on those plans in the event of a disaster or emergency, our business and reputation would be harmed.

Environmentally hazardous conditions may adversely affect us.

Under various federal, state and local environmental laws, a current or previous owner or operator of real property may be liable for the cost of removing or remediating hazardous or toxic substances on such property. Such laws often impose liability whether or not the owner or operator knew of, or was responsible for, the presence of such hazardous or toxic substances. Even if more than one person may have been responsible for the contamination, each person covered by applicable environmental laws may be held responsible for all of the

 

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clean-up costs incurred. In addition, third parties may sue the owner or operator of a site for damages based on personal injury, natural resources or property damage or other costs, including investigation and clean-up costs, resulting from the environmental contamination. The presence of hazardous or toxic substances on one of our properties, or the failure to properly remediate a contaminated property, could give rise to a lien in favor of the government for costs it may incur to address the contamination or otherwise adversely affect our ability to sell the property. Environmental laws also may impose restrictions on the manner in which property may be used or businesses may be operated. A property owner who violates environmental laws may be subject to sanctions which may be enforced by governmental agencies or, in certain circumstances, private parties. In connection with the acquisition and ownership of our properties, we may be exposed to such costs. The cost of defending against environmental claims, of compliance with environmental regulatory requirements or of remediating any contaminated property could materially and adversely affect us.

Compliance with new or more stringent environmental laws or regulations or stricter interpretation of existing laws may require material expenditures by us. We may be subject to environmental laws or regulations relating to our properties, such as those concerning lead-based paint, mold, asbestos, radon, pesticides, proximity to power lines or other issues. We cannot assure you that future laws, ordinances or regulations will not impose any material environmental liability or that the current environmental condition of our properties will not be affected by existing conditions of the land, operations in the vicinity of the properties or the activities of unrelated third parties. In addition, we may be required to comply with various local, state and federal fire, health, life-safety and similar regulations. Failure to comply with applicable laws and regulations could result in fines and/or damages, suspension of personnel, civil liability or other sanctions.

Risks Related to Our Intellectual Property and Technology

Our internal information technology systems may fail or suffer security breaches, loss or leakage of data, and other disruptions, which could disrupt our business or result in the loss of critical and confidential information.

The evolution of technology systems introduces ever more complex security risks that are difficult to predict and defend against. An increasing number of companies, including those with significant online operations, have recently disclosed breaches of their security, some of which involved sophisticated tactics and techniques allegedly attributable to criminal enterprises or nation-state actors. Successful breaches, employee malfeasance, or human or technological error could result in, for example, unauthorized access to, disclosure, modification, misuse, loss, or destruction of company, customer, or other third party data or systems; theft of sensitive, regulated, or confidential data including personal information and intellectual property; the loss of access to critical data or systems through ransomware, destructive attacks or other means; and business delays, service or system disruptions or denials of service. We experience cyber incidents and other security incidents of varying degrees from time to time, and there can be no assurance that any future incidents would not lead to costs or consequences that materially impact our operations or business. In response to these incidents, we have implemented controls and taken other preventative actions to further strengthen our systems against future incidents. However, we cannot guarantee that such measures will provide sufficient security, that we will be able to react in a timely manner, or that our remediation efforts following a cybersecurity incident will be successful.

In addition, we do not know whether our current practices will be deemed sufficient under applicable laws or whether new regulatory requirements might require us to make significant changes to our current practices. If there is a breach of our computer systems, and we know or suspect that certain personal information has been accessed, or used inappropriately, we may need to inform the affected individual and may be subject to significant fines and penalties. Further, under certain regulatory schemes, we may be liable for statutory damages on a per breached record basis, irrespective of any actual damages or harm to the individual. In the event of a breach we could face government scrutiny or consumer class actions alleging statutory damages amounting to hundreds of millions, and possibly billions of dollars.

The risk of cybersecurity incidents directed at us or our third-party vendors includes uncoordinated individual attempts to gain unauthorized access to information technology systems, as well as to sophisticated and targeted measures known as advanced persistent threats. In addition, we face the risk of confidential data inadvertently

 

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leaking through human or technological errors. Cybersecurity incidents are also constantly evolving, increasing the difficulty of detecting and successfully defending against them. In the ordinary course of our business, we and our third-party vendors collect and store personal information, as well as our proprietary business information and intellectual property and that of our customers and employees.

Additionally, we rely on third-parties and their security procedures for the secure storage, processing, maintenance, and transmission of information that is critical to our operations. Despite measures designed to prevent, detect, address, and mitigate cybersecurity incidents, such incidents may occur to us or our third-party providers and, depending on their nature and scope, could potentially result in the misappropriation, destruction, corruption or unavailability of critical data and confidential or proprietary information (our own or that of third parties, including personal information of our customers and employees) and the disruption of business operations. Any such compromises to our security, or that of our third-party vendors, could cause customers to lose trust and confidence in us and stop using our website and mobile applications. In addition, we may incur significant costs for remediation that may include liability for stolen assets or information, repair of system damage, and compensation to customers, employees, and business partners. We may also be subject to government enforcement proceedings and legal claims by private parties. Actual or anticipated attacks may cause us to incur increasing costs, including costs to deploy additional personnel and protection technologies, train employees and engage third-party experts and consultants.

Any actual or alleged security breaches or alleged violations of federal or state laws or regulations relating to privacy and data security could result in mandated user notifications, litigation, government investigations, significant fines, and expenditures; divert management’s attention from operations; deter people from using our platform; damage our brand and reputation; and materially adversely affect our business, results of operations, and financial condition. Defending against claims or litigation based on any security breach or incident, regardless of their merit, will be costly and may cause reputation harm. The successful assertion of one or more large claims against us that exceed available insurance coverage, denial of coverage as to any specific claim, or any change or cessation in our insurance policies and coverages, including premium increases or the imposition of large deductible requirements, could have a material adverse effect on our business, results of operations, and financial condition.

We process, store and use personal information and other data, which subjects us to governmental regulation and other legal obligations related to privacy, and violation of these privacy obligations could result in a claim for damages, regulatory action, loss of business, or unfavorable publicity.

We receive, store and process personal information and other customer information, or personal information. There are numerous federal and state laws, as well as regulations and industry guidelines, regarding privacy and the storing, use, processing, and disclosure and protection of personal information, the scope of which are changing, subject to differing interpretations, and may be inconsistent among countries or conflict with other rules. Additionally, laws, regulations, and standards covering marketing and advertising activities conducted by telephone, email, mobile devices, and the internet, may be applicable to our business, such as the Telephone Consumer Protection Act (the “TCPA”) (as implemented by the Telemarketing Sales Rule), the CAN-SPAM Act, and similar state consumer protection laws. We generally seek to comply with industry standards and are subject to the terms of our own privacy policies and privacy-related obligations to third parties. We strive to comply with all applicable laws, policies, legal obligations and industry codes of conduct relating to privacy and data protection to the extent possible. However, it is possible that these obligations may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or regulations, making enforcement, and thus compliance requirements, ambiguous, uncertain, and potentially inconsistent. Any failure or perceived failure by us to comply with our privacy policies, privacy-related obligations to customers or other third parties, or our privacy-related legal obligations, or any compromise of security that results in the unauthorized access to or unintended release of personally identifiable information or other customer data, may result in governmental enforcement actions, litigation, or public statements against us by consumer advocacy groups or others. Any of these events could cause us to incur significant costs in investigating and defending such

 

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claims and, if found liable, pay significant damages. Further, these proceedings and any subsequent adverse outcomes may cause our customers to lose trust in us, which could have an adverse effect on our reputation and business.

Any significant change to applicable laws, regulations or industry practices regarding the use or disclosure of personal information, or regarding the manner in which the express or implied consent of customers for the use and disclosure of personal information is obtained, could require us to modify our products and features, possibly in a material manner and subject to increased compliance costs, which may limit our ability to develop new products and features that make use of the personal information that our customers voluntarily share. For example, the California Consumer Privacy Act (the “CCPA”), which took effect on January 1, 2020, imposes obligations and restrictions on companies regarding their collection, use, and sharing of personal information and provides new and enhanced data privacy rights to California residents. The CCPA imposes a severe statutory damages framework. Since the enactment of the CCPA, new privacy and data security laws have been proposed in more than half of the states in the U.S. and in the U.S. Congress, including another law in California where voters approved a ballot initiative from privacy rights advocates intending to agument and expand the CCPA, the California Privacy Rights Act (the “CPRA”), on November 3, 2020, which will take effect on January 1, 2023 (with a lookback to data collected, on or after January 1, 2022). The CPRA will significantly modify the CCPA, including by creating a new state agency that will be vested with the authority to implement and enforce California’s privacy laws. Additionally, Nevada enacted a law that went into force on October 1, 2019 and requires companies to honor consumers’ requests to no longer sell their data. Violators may be subject to injunctions and civil penalties of up to $5,000 per violation. Several other states are actively considering privacy laws, which may impose substantial penalties for violations, impose significant costs for investigations and compliance, allow private class-action litigation and carry significant potential liability for our business. We expect that there will continue to be new proposed laws, regulations, and industry standards concerning privacy, data protection, and information security and we cannot determine the impact such future laws, regulations, and standards may have on our business. We could be subject to legal claims, government action, or harm to our reputation or incur significant remediation costs if we experience a security breach or our practices fail, or are seen as failing, to comply with our policies or with applicable laws concerning personally identifiable information.

Any of the foregoing could materially adversely affect our brand, reputation, business, results of operations, and financial condition.

Any significant disruption in service in our computer systems and third-party networks and mobile infrastructure that we depend on could result in a loss of customers and we may be unable to maintain and scale the technology underlying our offerings.

Customers and potential customers access our products primarily through our website and mobile applications. Our ability to attract, retain and serve customers depends on the reliable performance and availability of our website, mobile application, and technology infrastructure. Furthermore, we depend on the reliable performance of third-party networks and mobile infrastructure to provide our technology offerings to our customers and potential customers. The proper operation of these networks and infrastructure is beyond our control, and service interruptions or website unavailability could impact our ability to service our customers in a timely manner, and may have an adverse effect on existing and potential customer relationships.

Our information systems and technology may not be able to continue to accommodate our growth and may be subject to security risks. The cost of maintaining such systems may increase. Such a failure to accommodate growth, or an increase in costs related to such information systems, could have a material adverse effect on our business and results of operations and could result in a loss of customers.

 

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Failure to protect our trade secrets, know-how, proprietary applications, business processes and other proprietary information, could adversely affect the value of our technology and products.

Our success and ability to compete depends in part on our intellectual property and our other proprietary business information. We seek to control access to our proprietary information by entering into a combination of confidentiality and proprietary rights agreements, invention assignment agreements and nondisclosure agreements with our employees, consultants and third parties with whom we have relationships. We have filed trademark and patent applications to protect certain aspects of our intellectual property. However, we cannot guarantee that patents will issue on our pending patent applications or that we will be successful in registering our trademarks. We may be unable to secure intellectual property protection for all of our technology and methodologies, or the steps we take to enforce our intellectual property rights may be inadequate. Furthermore, monitoring unauthorized use of our intellectual property is difficult and costly, and we cannot guarantee that the steps we have taken to protect our proprietary technologies will be effective to enforce our rights against third parties. Third parties may knowingly or unknowingly infringe our proprietary rights or challenge proprietary rights held by us, and we may not be able to prevent infringement or misappropriation of our proprietary rights without incurring substantial expense. If our intellectual property rights are used or misappropriated by third parties, the value of our brand and other intangible assets may be diminished and competitors may be able to more effectively mimic our products and methods of operations. Any of these events would have a material adverse effect on our business, financial condition and results of operations.

In the future we may be party to intellectual property rights claims and other litigation which are expensive to support, and if resolved adversely, could have a significant impact on us.

Our competitors and other third parties may own or claim to own intellectual property relating to the real estate industry. In the future, third parties may claim that we are infringing on their intellectual property rights, and we may be found to be infringing such rights. Any claims or litigation, regardless of merit, could cause us to incur significant expenses. If any such claims are successfully asserted against us, it could require us to pay significant damages or ongoing licensing payments, prevent us from offering our products or services, or require us to comply with unfavorable terms. Even if we were to prevail, the time and resources necessary to resolve such disputes could be costly, time-consuming, and divert the attention of management and key personnel from our business operations. If we are not successful in defending ourselves against any potential future claims, we may be required to pay damages and may be subject to injunctions, each of which could harm our business, results of operations, financial condition and reputation.

Our services utilize third-party open source software components, which may pose particular risks to our proprietary software, technologies, products and services in a manner that could negatively affect our business.

We use open source software in our services and will continue to use open source software in the future. Use and distribution of open source software may entail greater risks than use of third-party commercial software, as open source licensors generally do not provide support, warranties, indemnification or other contractual protections regarding infringement claims or the quality of the code, and may not be regularly maintained and updated in order to contain and patch possible security vulnerabilities. To the extent that our services depend upon the successful operation of open source software, any undetected errors or defects in this open source software could prevent the deployment or impair the functionality of our platform, delay new solutions introductions, result in a failure of our platform, and injure our reputation.

Some open source licenses contain requirements that we make available source code for modifications or derivative works we create based upon the type of open source software we use, or grant other licenses to our intellectual property. If we combine our proprietary software with such open source software in a certain manner, we could, under certain open source licenses, be required to release or license the source code of our proprietary software to the public. From time to time, we may be subject to claims asserting ownership of, or demanding

 

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release of, our source code, the open source software or derivative works that were developed using such software, or requiring us to provide attributions of any open source software incorporated into our distributed software, or otherwise seeking to enforce the terms of the applicable open source license. These claims could also result in litigation, require us to purchase a commercial license or require us to devote additional research and development resources to re-engineer our software or change our products or services, any of which would have a negative effect on our business and results of operations. Additionally, the terms of many open source licenses to which we are subject have not been interpreted by U.S. or foreign courts. There is a risk that open source software licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to market or provide our products.

We rely on licenses to use the intellectual property rights of third parties which are incorporated into our products and services. Failure to renew or expand existing licenses may require us to modify, limit or discontinue certain offerings, which could materially affect our business, financial condition and results of operations.

We rely on products, technologies and intellectual property that we license from third parties for use in our services. We cannot assure that these third-party licenses, or support for such licensed products and technologies, will continue to be available to us on commercially reasonable terms, if at all. In the event that we cannot renew or expand existing licenses, we may be required to discontinue or limit our use of the products that include or incorporate the licensed intellectual property.

We cannot be certain that our licensors are not infringing the intellectual property rights of others or that our suppliers and licensors have sufficient rights to the technology in all jurisdictions in which we may operate. Some of our license agreements may be terminated by our licensors for convenience. If we are unable to obtain or maintain rights to any of this technology because of intellectual property infringement claims brought by third parties against our suppliers and licensors or against us, or if we are unable to continue to obtain the technology or enter into new agreements on commercially reasonable terms, our ability to develop our services containing that technology could be severely limited and our business could be harmed. Additionally, if we are unable to obtain necessary technology from third parties, we may be forced to acquire or develop alternate technology, which may require significant time and effort and may be of lower quality or performance standards. This would limit and delay our ability to provide new or competitive offerings and increase our costs. If alternate technology cannot be obtained or developed, we may not be able to offer certain functionality as part of our offerings, which could adversely affect our business, financial condition and results of operations.

Our software is highly complex and may contain undetected errors.

The software and code underlying our platform is highly interconnected and complex and may contain undetected bugs, errors, malicious code, vulnerabilities, or other defects, some of which may remain undetected or may only be discovered after the code has been released. We release or update our software code regularly and this practice may result in the more frequent introduction of errors or vulnerabilities into the software underlying our platform, which can impact the customer experience on our platform. Additionally, due to the interconnected nature of the software underlying our platform, updates to certain parts of our code, including changes to our mobile app or website or third party application programming interfaces on which our mobile app or website rely, could have an unintended impact on other sections of our code, which may result in errors or vulnerabilities to our platform. Any errors or vulnerabilities discovered in our code after release could impact the security of our systems or result in the inadvertent disclosure of sensitive or other regulated information, cause damage to our reputation, loss of our customers, loss of revenue or liability for damages, any of which could adversely affect our growth prospects and our business.

Furthermore, our development and testing processes may not detect errors and vulnerabilities in our technology offerings prior to their implementation. Any inefficiencies, errors, technical problems or vulnerabilities arising in our technology offerings after their release could reduce the quality of our products or interfere with our customers’ access to and use of our technology and offerings.

 

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Our fraud detection processes and information security systems may not successfully detect all fraudulent activity by third parties aimed at our employees or customers, which could adversely affect our reputation and business results.

Third-party actors have attempted in the past, and may attempt in the future, to conduct fraudulent activity by engaging with our customers, particularly in our title insurance and escrow business. We make a large number of wire transfers in connection with loan and real estate closings and process sensitive personal data in connection with these transactions. Though we have sophisticated fraud detection processes and have taken other measures to identify fraudulent activity on our mobile applications, websites and internal systems, we may not be able to detect and prevent all such activity. Similarly, the third parties we use to effectuate these transactions may fail to maintain adequate controls or systems to detect and prevent fraudulent activity. Persistent or pervasive fraudulent activity may cause customers and real estate partners to lose trust in us and decrease or terminate their usage of our products, or could result in financial loss, thereby harming our business and results of operations.

Risks Related to Our Liquidity and Capital Resources

We utilize a significant amount of indebtedness in the operation of our business, and so our cash flows and operating results could be adversely affected by required payments of debt or related interest and other risks of our debt financing.

As of March 31, 2021 we had approximately $206.7 million aggregate principal amount of indebtedness outstanding, including $199.4 million of loans under asset-backed senior and mezzanine secured credit facilities. Our leverage could have meaningful consequences to us, including increasing our vulnerability to economic downturns, limiting our ability to withstand competitive pressures, or reducing our flexibility to respond to changing business and economic conditions. We are also subject to general risks associated with debt financing, including (1) our cash flow may not be sufficient to satisfy required payments of principal and interest; (2) we may not be able to refinance our existing indebtedness or refinancing terms may be less favorable to us than the terms of our existing debt; (3) debt service obligations could reduce funds available for capital investment and general corporate purposes; (4) any default on our indebtedness could result in acceleration of the indebtedness and foreclosure on the homes collateralizing that indebtedness, with our attendant loss of any prospective income and equity value from such property; and (5) aged real estate may be ineligible for financing on our debt facilities potentially forcing the sale of aged real estate for prices that do not allow us to meet our margin targets or cover our costs to repay those facilities. Any of these risks could place strains on our cash flows, reduce our ability to grow and adversely affect our results of operations.

We rely on agreements with third parties to finance our business.

We have entered into debt agreements with a limited number of counterparties to provide capital for the growth and operation of our businesses, including to finance our purchase and renovation of homes. If we fail to maintain adequate relationships with potential financial sources, or if we are unable to renew, refinance or extend our existing debt arrangements on favorable terms or at all, we may be unable to maintain sufficient inventory, which would adversely affect our business and results of operations. In addition, some of our secured credit facilities are not fully committed, meaning the applicable lender may not be obligated to advance new loan funds if they choose not to do so. Obtaining new or replacement funding arrangements may not be possible or may be at higher interest rates or other less favorable terms.

Our financing sources are not required to extend the maturities of our financing arrangements, and if a financing source is unable or unwilling to extend financing, and other financing sources are unable or unwilling to make or increase their financing commitments, then we will be required to repay the outstanding balance of the financing on the related maturity date. If we are unable to pay the outstanding balance of our debt obligations at maturity, the financing sources generally have the right to foreclose on the homes and other collateral securing that debt and to charge higher “default rates” of interest until the outstanding obligations are paid in full. If we are unable to renew or extend the terms of our existing senior and mezzanine secured credit facilities, we may not be able to

 

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terminate or prepay the secured credit facilities without incurring significant financial costs. If realized, any of these financing risks could negatively impact our results of operations and financial condition.

We intend to rely on proceeds from the sale of financed homes to repay amounts owed under our property financing facilities, but such proceeds may not be available or may be insufficient to repay the amounts when they become due.

For our senior and mezzanine secured credit facilities, we typically are required to repay amounts owed with respect to a financed home upon the sale of that home. There is no assurance such sale proceeds will fully cover the amounts owed. Our senior and mezzanine secured credit facilities commonly have initial terms of 18 months or less. It may be the case that not all homes securing these arrangements will be sold on or before the maturity dates of such financing arrangements, which would mean that sale proceeds would not be available to pay the amounts due at maturity. We may also be required to repay amounts owed with respect to a financed home prior to the sale of that home and prior to maturity of the related financing facility, typically due to the home having been held in our inventory for an extended period of time or, less commonly, if other unforeseen issues with the home arise during our holding period. In these situations, we may use cash on hand to repay the amounts owed or contribute other homes as additional collateral. To the extent we do not have sufficient cash or substitute collateral or are unable to draw on other financing facilities to make the required repayments, which could occur if a significant amount of our debt were to become due suddenly and unexpectedly, we would be in default under the related facility.

Covenants in our debt agreements may restrict our borrowing capacity or operating activities and adversely affect our financial condition.

Certain of our existing debt agreements contain, and future debt agreements may contain, various affirmative, negative, financial and collateral performance covenants. Specifically, we need to maintain a certain tangible net worth and liquidity minimums under certain of these facilities. These covenants may limit our operational flexibility or restrict our ability to engage in transactions that we believe would otherwise be in the best interests of our shareholders. If we breach these covenants, in certain cases, we could be required to repay all of the relevant debt immediately, even in the absence of a payment default. The occurrence of these events would have an adverse impact on our financial condition and results of operations and such impact could be material.

The borrowers and certain other loan parties under the debt facilities we use to finance the purchase and renovation of homes are special purpose entity (“SPE”) subsidiaries of Offerpad. While our SPEs’ lenders’ recourse in most situations following an event of default is only to the applicable SPE or its assets, we have provided limited non-recourse carve out guarantees under our senior and mezzanine secured credit facilities for certain of the SPEs’ obligations in situations involving “bad acts” by an Offerpad entity and certain other limited circumstances that are generally under our control. To the extent a guaranty obligation is triggered, we may become obligated to pay all or a portion of the amounts owed by our SPEs and other subsidiaries to their respective lenders.

Our debt facilities contain cross defaults and similar provisions that could cause us to be in default under multiple debt facilities or otherwise lose access to financing for new homes and excess proceeds from sales of homes in the event we default under a single facility.

If an event of default or similar event occurs under one of our senior or mezzanine secured credit facilities, this may trigger an event of default under another senior or mezzanine secured credit facility or result in us losing access to financing through our senior and mezzanine secured credit facilities or to excess proceeds from sales of homes that would otherwise be available to us. In addition, our senior and mezzanine secured credit facilities currently contain cross defaults to certain other indebtedness. Following consummation of the business combination, it is possible that our debt facilities could include similar cross defaults to indebtedness of Offerpad Solutions. The foregoing considerations significantly increase the likelihood that a default or similar event under one or more of our debt facilities would result in adverse consequences for our other debt facilities.

 

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Failure to hedge effectively against interest rate changes may adversely affect our results of operations.

Borrowings under certain of our senior secured facilities bear interest at variable rates and expose us to interest rate risk. If interest rates were to increase, our debt service obligations on the variable rate indebtedness would increase and our earnings and cash flows will correspondingly decrease. Increased interest costs could also reduce the amount of debt financing that our homes inventory can support. Assuming no change in the outstanding borrowings on our senior secured facilities, we estimate that a one percentage point increase in LIBOR would have increased our annual interest expense by approximately $1.7 million for the year ended December 31, 2020 and $1.8 million for the three months ended March 31, 2021.

In connection with our variable debt, we may seek to obtain interest rate protection in the form of swap agreements, interest rate cap contracts or similar derivatives or instruments to hedge against the possible negative effects of interest rate increases. There is no assurance that we will be able to obtain any such interest rate hedging arrangements on attractive terms or at all. Even if we are successful in obtaining interest rate hedges, we cannot assure you that any hedging will adequately relieve the adverse effects of interest rate increases or that counterparties under these agreements will honor their obligations thereunder.

We could be subject to additional tax liabilities and our ability to use net operating loss carryforwards and other tax attributes may be limited in connection with the business combination or other ownership changes.

We are subject to federal and state income and non-income taxes in the United States. Tax laws, regulations, and administrative practices in various jurisdictions may be subject to significant change, with or without notice, due to economic, political, and other conditions, and significant judgment is required in evaluating and estimating these taxes. Our effective tax rates could be affected by numerous factors, such as entry into new businesses and geographies, changes to our existing business and operations, acquisitions and investments and how they are financed, changes in our stock price, changes in our deferred tax assets and liabilities and their valuation, and changes in the relevant tax, accounting, and other laws, regulations, administrative practices, principles and interpretations. We are required to take positions regarding the interpretation of complex statutory and regulatory tax rules and on valuation matters that are subject to uncertainty, and IRS or other tax authorities may challenge the positions that we take.

We have incurred losses during our history and do not expect to become profitable in the near future, and may never achieve profitability. To the extent that we continue to generate taxable losses, unused losses will carry forward to offset future taxable income, if any, until such unused losses expire, if at all. As of December 31, 2020, the Company had federal and state net operating loss (“NOL”) carryforwards of $200.5 million. Under the Tax Act, as modified by the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), U.S. federal net operating loss carryforwards generated in taxable periods beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility of such net operating loss carryforwards in taxable years beginning after December 31, 2020, is limited to 80% of taxable income. It is uncertain if and to what extent various states will conform to the Tax Act or the CARES Act.

In addition, our net operating loss carryforwards are subject to review and possible adjustment by the IRS, and state tax authorities. Under Sections 382 and 383 of the Code, our federal net operating loss carryforwards and other tax attributes may become subject to an annual limitation in the event of certain cumulative changes in our ownership. An “ownership change” pursuant to Section 382 of the Code generally occurs if one or more stockholders or groups of stockholders who own at least 5% of a company’s stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period. Our ability to utilize our net operating loss carryforwards and other tax attributes to offset future taxable income or tax liabilities may be limited as a result of ownership changes, including potential changes in connection with the business combination or other transactions. Similar rules may apply under state tax laws.

We have not yet determined the amount of the cumulative change in our ownership resulting from the business combination or other transactions, or any resulting limitations on our ability to utilize our net operating loss

 

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carryforwards and other tax attributes. If we earn taxable income, such limitations could result in increased future income tax liability to us and our future cash flows could be adversely affected. We have recorded a full valuation allowance related to our net operating loss carryforwards and other deferred tax assets due to the uncertainty of the ultimate realization of the future benefits of those assets.

We will need additional capital to pursue our business objectives and respond to business opportunities, challenges or unforeseen circumstances, and we cannot be sure that additional financing will be available.

We will require additional capital and debt financing to pursue our business objectives and respond to business opportunities, challenges or unforeseen circumstances, including to increase our marketing expenditures to improve our brand awareness, build and maintain our inventory of homes, develop new products or services or further improve existing products and services (including mortgage lending), enhance our operating infrastructure and acquire complementary businesses and technologies. During past economic and housing downturns and more recently at the onset of COVID-19, credit markets constricted and reduced sources of liquidity.

If cash on hand, cash generated from operations, and the net proceeds from the business combination and related transactions are not sufficient to meet our cash and liquidity needs, we may need to seek additional capital and engage in equity or debt financings to secure funds. However, additional funds may not be available when we need them on terms that are acceptable to us, or at all. In addition, any financing that we secure in the future could involve restrictive covenants which may make it more difficult for us to obtain additional capital and to pursue business opportunities.

Our ability to obtain financing will depend, among other things, on our product development efforts, business plans, operating performance and condition of the capital markets and housing markets at the time we seek financing. Volatility in the credit markets may also have an adverse effect on our ability to obtain debt financing. If we raise additional funds through the issuance of equity, equity-linked or debt securities, those securities may have rights, preferences or privileges senior to the rights of our common stock, or may require us to agree to unfavorable terms, and our existing stockholders may experience significant dilution.

If new financing sources are required, but are insufficient or unavailable, our ability to continue to pursue our business objectives and to respond to business opportunities, challenges or unforeseen circumstances could be significantly limited, and our business, operating results, financial condition and prospects could be adversely affected.

We may use derivatives and other instruments to reduce our exposure to interest fluctuations and those derivatives and other instruments may not prove to be effective.

We may use derivatives or other instruments to reduce our exposure to adverse changes in interest rates. Hedging interest rate risk is a complex process, requiring sophisticated models and constant monitoring. Due to interest rate fluctuations, hedged assets and liabilities will appreciate or depreciate in market value. The effect of this unrealized appreciation or depreciation will generally be offset by income or loss on the derivative instruments that are linked to the hedged assets and liabilities. If we engage in derivative transactions, we will be exposed to credit and market risk. If the counterparty fails to perform, credit risk exists to the extent of the fair value gain in the derivative. Market risk exists to the extent that interest rates change in ways that are significantly different from what we expected when we entered into the derivative transaction. Our hedging activity, if any, may fail to provide adequate coverage for interest rate exposure due to market volatility, hedging instruments that do not directly correlate with the interest rate risk exposure being hedged or counterparty defaults on obligations.

When the London Inter-Bank Offered Rate (“LIBOR”) is discontinued, interest payments under our senior secured credit facilities may be calculated using another reference rate.

In July 2017, the United Kingdom Financial Conduct Authority (“FCA”), which regulates LIBOR, announced that the FCA intends to phase out the use of LIBOR by the end of 2021. In response, the U.S. Federal Reserve, in

 

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conjunction with the Alternative Reference Rates Committee, has proposed replacing U.S. dollar LIBOR with the Secured Overnight Financing Rate (“SOFR”), which is a new index calculated by short-term repurchase agreements and backed by U.S. Treasury securities. The market transition away from LIBOR towards SOFR is expected to be complicated, and there is no guarantee that SOFR will become a widely accepted benchmark in place of LIBOR. LIBOR is used as a benchmark rate for our senior secured credit facilities. Some of these agreements do not contain fulsome fallback language for circumstances in which LIBOR ceases to be published. The transition process may involve, among other things, increased volatility and illiquidity in markets for instruments that currently rely on LIBOR and may result in increased borrowing costs, uncertainty under our financing facilities, or difficult and costly processes to amend our financing agreements. There remains uncertainty regarding the future utilization of LIBOR and the nature of any replacement rate, and we are uncertain what impact a transition away from LIBOR may have on our business, financial results, and operations.

Failures at financial institutions at which we deposit funds could adversely affect us.

We deposit substantial funds in various financial institutions in excess of insured deposit limits. In the event that one or more of these financial institutions fail, there is no guarantee that we could recover the deposited funds in excess of federal deposit insurance. Under these circumstances, our losses could have a material adverse effect on our results of operations or financial condition.

Risks Related to Our Capital Structure and Ownership of Our Class A Common Stock Following the business combination

If securities or industry analysts do not publish research or reports about our business, if they adversely change their recommendations regarding our shares or if our results of operations do not meet their expectations, our share price and trading volume could decline.

The trading market for our Class A common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business. We do not have any control over these analysts. Securities and industry analysts do not currently, and may never, publish research on us. If no securities or industry analysts commence coverage of us, the trading price of our shares would likely be negatively impacted. In the event securities or industry analysts initiated coverage, and one or more of these analysts cease coverage of us or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our share price or trading volume to decline. Moreover, if one or more of the analysts who cover us downgrade our stock, or if our results of operations do not meet their expectations, our share price could decline.

Future resales of common stock after the consummation of the business combination may cause the market price of our securities to drop significantly, even if our business is doing well.

Pursuant to the Registration Rights Agreement, the Sponsor Support Agreement and the Proposed Bylaws, after the consummation of the business combination and subject to certain exceptions, the Sponsor, those receiving shares of Offerpad Solutions’ common stock as consideration pursuant to the Merger Agreement, our directors, officers and employees receiving shares of Offerpad Solutions common stock upon the settlement or exercise of warrants, stock options or other equity awards will be contractually restricted from selling or transferring any of their shares of Offerpad Solutions common stock. Such restrictions begin at Closing and end, in the case of the shares that are restricted pursuant to the Proposed Bylaws, on the date that is 180 days after Closing and in the case of the shares restricted pursuant to the Registration Rights Agreement or the Sponsor Agreement, on such dates as are described in the section titled “The Business Combination Proposal—Certain Agreements Related to the Business Combination.”

However, following the expiration of the applicable lock-up period, such equityholders will not be restricted from selling shares of Offerpad Solutions common stock held by them, other than by applicable securities laws. In addition, the PIPE Investors will not enter into lock-up agreements restricting them from selling the shares of Offerpad Solutions common stock acquired by them. See “—There are risks to our public stockholders who are not affiliates of the Sponsor of becoming stockholders of Offerpad Solutions through the business combination rather than through an underwritten public offering, including no independent due diligence review by an underwriter.” As such, sales of a

 

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substantial number of shares of Offerpad Solutions common stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our Class A common stock or our warrants. As restrictions on resale end and registration statements (filed after the Closing to provide for the resale of such shares from time to time) are available for use, the sale or possibility of sale of these shares could have the effect of increasing the volatility in the market price of our Class A common stock, and the market price of our Class A common stock could decline if the holders of currently restricted shares or other shareholders sell their shares or are perceived by the market as intending to sell them.

The provisions of the Proposed Charter requiring exclusive forum in the Court of Chancery of the State of Delaware and the federal district courts of the United States for certain types of lawsuits may have the effect of discouraging lawsuits against our directors and officers.

The Proposed Charter provides that, to the fullest extent permitted by law, and unless Offerpad Solutions consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, in the event that the Chancery Court does not have jurisdiction, the federal district court for the District of Delaware or other state courts of the State of Delaware) and any appellate court thereof will be the sole and exclusive forum for (i) any derivative action, suit or proceeding brought on behalf of Offerpad Solutions, (ii) any action, suit or proceeding asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, stockholder or employee of Offerpad Solutions to Offerpad Solutions or its stockholders, (iii) any action, suit or proceeding arising pursuant to any provision of the DGCL or Offerpad Solutions’ bylaws or certificate of incorporation (as each may be amended from time to time), (iv) any action, suit or proceeding as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, or (v) any action, suit or proceeding asserting a claim against Offerpad Solutions or any current or former director, officer or stockholder governed by the internal affairs doctrine.

Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Accordingly, both state and federal courts have jurisdiction to entertain such Securities Act claims. To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, the Proposed Charter provides that, unless Offerpad Solutions consents in writing to the selection of an alternative forum, to the fullest extent permitted by law, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act; however, there is uncertainty as to whether a court would enforce such provision, and investors cannot waive compliance with federal securities laws and the rules and regulations thereunder. Notwithstanding the foregoing, the Proposed Charter provides that the exclusive forum provision will not apply to suits brought to enforce any cause of action arising under the Securities Act, any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.

These provisions may have the effect of discouraging lawsuits against Offerpad Solutions’ directors and officers. The enforceability of similar choice of forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and it is possible that, in connection with any applicable action brought against Offerpad Solutions, a court could find the choice of forum provisions contained in the Proposed Charter to be inapplicable or unenforceable in such action.

We cannot predict the impact our multi-class structure may have on the stock price of our Class A common stock.

We cannot predict whether our multi-class structure will result in a lower or more volatile market price of Class A common stock or in adverse publicity or other adverse consequences. For example, certain index providers have policies that restrict or prohibit the inclusion of companies with multiple-class share structures in certain of their indices, including the Russell 2000 and the S&P 500, S&P MidCap 400 and S&P SmallCap 600,

 

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which together make up the S&P Composite 1500. Beginning in 2017, MSCI, a leading stock index provider, opened public consultations on their treatment of no-vote and multi-class structures and temporarily barred new multi-class listings from certain of its indices; however, in October 2018, MSCI announced its decision to include equity securities “with unequal voting structures” in its indices and to launch a new index that specifically includes voting rights in its eligibility criteria. Under the announced policies, our multi-class capital structure would make us ineligible for inclusion in certain indices, and as a result, mutual funds, exchange-traded funds and other investment vehicles that attempt to passively track those indices will not be investing in our stock. It is possible that these policies may depress the valuations of publicly traded companies that are excluded from the indices compared to those of other similar companies that are included. Because of our multi-class structure, we will likely be excluded from certain of these indices and we cannot assure you that other stock indices will not take similar actions. Given the sustained flow of investment funds into passive strategies that seek to track certain indices, exclusion from stock indices would likely preclude investment by many of these funds and could make shares of our Class A common stock less attractive to other investors. As a result, the market price of shares of our Class A common stock could be adversely affected.

Following the completion of the business combination, our founder and Chief Executive Officer will control a significant percentage of our voting power and will be able to exert significant control over the direction of our business.

Immediately following the business combination, Brian Bair, our founder and Chief Executive Officer will hold shares of our Class B common stock that will entitle him to 10 votes per share of Class B common stock until the Sunset Date, which we estimate will provide him with approximately 34.1% of the voting power of our company immediately after the business combination despite holding only 4.9% of the total common stock, in each case assuming no redemption of SPNV’s public shares. In the event all of SPNV’s public shares are redeemed, we estimate Mr. Bair would control approximately 37.3% of the voting power of our company immediately after the business combination despite holding only 5.6% of the total common stock.

Accordingly, for so long as Mr. Bair continues to control a significant percentage of the voting power of our company, he will be able to significantly influence the composition of our board and management and the approval of actions requiring stockholder approval. The concentration of ownership could also deprive you of an opportunity to receive a premium for your shares of Class A common stock as part of a sale of us and ultimately might affect the market price of our Class A common stock.

Delaware law and Offerpad Solutions’ Proposed Charter and Proposed Bylaws contain certain provisions, including anti-takeover provisions, that limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable.

The Proposed Charter and Proposed Bylaws that will be in effect upon consummation of the business combination, and the DGCL, contain provisions that could have the effect of rendering more difficult, delaying, or preventing an acquisition that stockholders may consider favorable, including transactions in which stockholders might otherwise receive a premium for their shares. These provisions could also limit the price that investors might be willing to pay in the future for shares of our Class A common stock, and therefore depress the trading price. These provisions could also make it difficult for stockholders to take certain actions, including electing directors who are not nominated by the incumbent members of our board of directors or taking other corporate actions, including effecting changes in our management. Among other things, the Proposed Charter and Proposed Bylaws include provisions that:

 

   

authorize Class B common stock that will entitle Brian Bair, our Chief Executive Officer and founder, to 10 votes per share of such stock until the Sunset Date;

 

   

provide for a classified board of directors with staggered, three-year terms;

 

   

permit our board of directors to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights,

 

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without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;

 

   

prohibit cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;

 

   

limit the liability of, and provide for the indemnification of, our directors and officers;

 

   

permit our board of directors to amend the bylaws, which may allow our board of directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt;

 

   

require a supermajority vote of stockholders to amend certain provisions of the Proposed Charter and a supermajority vote of stockholders in order to amend the Proposed Bylaws;

 

   

limit our ability to engage in business combinations with certain interested stockholders without certain approvals; and

 

   

mandate advance notice procedures with which stockholders must comply in order to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in our board of directors and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of our company.

These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our board of directors or management.

We are an emerging growth company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies, this could make our securities less attractive to investors.

We are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we 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 auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. As a result, our stockholders may not have access to certain information they may deem important. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our common stock held by non-affiliates equaled or exceeded $700 million as of the end of any second quarter of a fiscal year, in which case we would no longer be an emerging growth company as of the end of such fiscal year. We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.

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. We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has

 

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different application dates for public or private companies, we, 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 our 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.

We do not intend to pay cash dividends for the foreseeable future.

Following the business combination, we currently intend to retain our future earnings, if any, to finance the further development and expansion of our business and do not intend to pay cash dividends in the foreseeable future. Any future determination to pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, restrictions contained in agreements and financing instruments, business prospects and such other factors as our board of directors deems relevant.

General Risks Related to Offerpad

We will incur increased costs as a result of operating as a public company, and our management will devote substantial time to new compliance initiatives.

If we complete the business combination and become a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company. Our management and other personnel, many of whom have limited experience managing a public company, will need to devote a substantial amount of time to these compliance initiatives. Moreover, we expect these rules and regulations to substantially increase our legal and financial compliance costs and make some activities more time-consuming and costly. For example, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be forced to accept reduced policy limits or incur substantially higher costs to maintain the same or similar coverage. We cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers.

Our management has limited experience in operating a public company.

Certain of our executive officers have limited experience in the management of a publicly traded company. Our management team may not successfully or effectively manage our transition to a public company that will be subject to significant regulatory oversight and reporting obligations under federal securities laws. Limited experience in dealing with the increasingly complex laws pertaining to public companies could be a significant disadvantage in that it is likely that an increasing amount of our management’s time may be devoted to these activities which will result in less time being devoted to the management and growth of Offerpad Solutions following the business combination. We may not have adequate personnel with the appropriate level of knowledge, experience and training in the accounting policies, practices or internal control over financial reporting required of public companies in the U.S. Our management will need to continually assess our staffing and training procedures to improve our internal control over financial reporting. Further, the development, implementation, documentation and assessment of appropriate processes, in addition to the need to remediate any potential deficiencies, will require substantial time and attention from management. The development and implementation of the standards and controls necessary for us to achieve the level of accounting standards required of a public company in the U.S. may require costs greater than expected. It is possible that we will be required to expand our employee base and hire additional employees to support our operations as a public company which will increase its operating costs in future periods.

 

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Some of our potential losses may not be covered by insurance. We may not be able to obtain or maintain adequate insurance coverage.

We maintain insurance to cover costs and losses from certain risk exposures in the ordinary course of our operations, but our insurance may not cover all of the costs and losses from all events. We are responsible for certain retentions and deductibles that vary by policy, and we may suffer losses that exceed our insurance coverage limits by a material amount. We may also incur costs or suffer losses arising from events against which we have no insurance coverage. In addition, large-scale market trends or the occurrence of adverse events in our business may raise our cost of procuring insurance or limit the amount or type of insurance we are able to secure. We may not be able to maintain our current coverage, or obtain new coverage in the future; on commercially reasonable terms or at all. Incurring uninsured or underinsured costs or losses could harm our business.

Our results of operations and financial condition are subject to management’s accounting judgments and estimates, as well as changes in accounting policies.

The preparation of our financial statements requires us to make estimates and assumptions affecting the reported amounts of our assets, liabilities, revenues and expenses. If these estimates or assumptions are incorrect, it could have a material adverse effect on our results of operations or financial condition. Generally accepted accounting principles in the United States are subject to interpretation by the Financial Accounting Standards Board, the American Institute of Certified Public Accountants, the Securities and Exchange Commission, and various bodies formed to promulgate and interpret appropriate accounting principles. A change in these principles or interpretations could have a significant effect on our reported financial results, and could affect the reporting of transactions completed before the announcement of a change.

Our management will be required to evaluate the effectiveness of our internal control over financial reporting. If we are unable to maintain effective internal control over financial reporting, investors may lose confidence in the accuracy of our financial reports.

As a public company, we will be required to maintain internal control over financial reporting and to report any material weaknesses in such internal control. Subject to limited exceptions, pursuant to Section 404 of the Sarbanes-Oxley Act, we will be required to evaluate and determine the effectiveness of our internal control over financial reporting, and our auditor will be required to deliver an attestation report on the effectiveness of our disclosure controls and internal control over financial reporting. An adverse report may be issued in the event our auditor is not satisfied with the level at which our controls are documented, designed or operating.

When evaluating our internal control over financial reporting, we may identify material weaknesses that we may not be able to remediate in time to meet the applicable deadline imposed upon us for compliance with the requirements of Section 404. If we identify any material weaknesses in our internal control over financial reporting or are unable to comply with the requirements of Section 404 in a timely manner or assert that our internal control over financial reporting is ineffective, or if our auditor is unable to express an opinion as to the effectiveness of our internal control over financial reporting, we could fail to meet our reporting obligations or be required to restate our financial statements for prior periods.

In addition, our internal control over financial reporting will not prevent or detect all errors and fraud. Because of the inherent limitations in all control systems, no evaluation can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud will be detected.

If there are material weaknesses or failures in our ability to meet any of the requirements related to the maintenance and reporting of our internal control, investors may lose confidence in the accuracy and completeness of our financial reports and that could cause the price of our Class A common stock to decline. In addition, we could become subject to investigations by the applicable stock exchange, the SEC or other regulatory authorities, which could require additional management attention and which could adversely affect our business.

 

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We will incur increased costs as a result of operating as a public company, and our management will devote substantial time to new compliance initiatives. If we complete the business combination and become a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company. As a public company, we will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as rules adopted, and to be adopted, by the SEC and the applicable stock exchange. Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives and may not effectively or efficiently manage our transition into a public company. Moreover, we expect these rules and regulations to substantially increase our legal and financial compliance costs and to make some activities more time-consuming and costly. The increased costs will increase our net loss. For example, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be forced to accept reduced policy limits or incur substantially higher costs to maintain the same or similar coverage. We cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, its board committees or as executive officers.

We may acquire other businesses which could require significant management attention, disrupt our business, dilute stockholder value and adversely affect our operating results.

As part of our business strategy, we may make investments in or acquire other companies, products or technologies. We may not realize benefits from any acquisition that we may make in the future. If we fail to integrate successfully such acquisitions, or the businesses and technologies associated with such acquisitions, into our company, the revenue and operating results of the combined company could be adversely affected. Any integration process will require significant time and resources, and we may not be able to manage the process successfully. We may not successfully evaluate or utilize the acquired business or technology and accurately forecast the financial impact of an acquisition transaction, including accounting charges. We may have to pay cash, incur debt or issue equity securities to pay for any such acquisition, each of which could affect our financial condition or the value of our capital stock. The sale of equity or issuance to finance any such acquisitions could result in dilution to our stockholders. The incurrence of indebtedness in connection with an acquisition would result in increased fixed obligations and could also include covenants or other restrictions that may impede our ability to manage our operations.

We are and will continue to be dependent on key personnel, and our failure to attract and retain other highly qualified personnel could harm our business.

Our success depends upon the continued service of our senior management team and successful transitions when management team members pursue other opportunities. In addition, our business depends on our ability to continue to attract, motivate and retain a large number of skilled employees across all of our product and service lines. Furthermore, much of our key technology and processes are custom-made for our business by our personnel. The loss of key personnel, including key members of management, as well as our engineering, product development, home operations, marketing, sales and support, finance and legal personnel could materially and adversely affect our ability to build on the efforts they have undertaken and to execute our business plan, and we may not be able to find adequate replacements. If we do not succeed in attracting well-qualified employees or retaining and motivating existing employees in a cost-effective manner, our business could be harmed.

Risks Related to SPNV and the Business Combination

Unless the context otherwise requires, all references in this subsection to the “Company,” “we,” “us” or “our” refer to SPNV prior to the consummation of the business combination.

 

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The Sponsor and the other SPNV Insiders have agreed to vote in favor of the business combination, regardless of how SPNV’s public stockholders vote.

Unlike some other blank check companies in which the initial stockholders agree to vote their founder shares in accordance with the majority of the votes cast by the public stockholders in connection with an initial business combination, the Sponsor and the other SPNV Insiders have agreed to vote any shares of SPNV’s common stock owned by them in favor of the Merger Agreement and the Transactions, in each case, subject to the terms and conditions contemplated by the Sponsor Support Agreement. As of the date of this proxy statement/prospectus, the Sponsor and the other SPNV Insiders own shares equal to approximately 20% of the issued and outstanding shares of SPNV’s common stock. Accordingly, it is more likely that the necessary stockholder approval will be received for the business combination than would be the case if the Sponsor and the other SPNV Insiders agreed to vote any shares of SPNV’s common stock owned by them in accordance with the majority of the votes cast by the public stockholders.

The Sponsor, certain members of the SPNV Board and certain SPNV officers have interests in the business combination that are different from or are in addition to other stockholders in recommending that stockholders vote in favor of approval of the business combination proposal and approval of the other proposals described in this proxy statement/prospectus.

When considering the SPNV Board’s recommendation that our stockholders vote in favor of the approval of the business combination proposal and the other proposals described in this proxy statement/prospectus, our stockholders should be aware that the Sponsor and certain directors and officers of SPNV have interests in the business combination that may be different from, or in addition to, the interests of our stockholders generally. These interests include:

 

   

the fact that the Sponsor and the other SPNV Insiders have agreed not to redeem any of their shares of common stock in connection with a stockholder vote to approve a proposed initial business combination;

 

   

the continued right of the Sponsor and the other SPNV Insiders to hold Offerpad Solutions common stock and the shares of Offerpad Solutions common stock to be issued to the Sponsor upon exercise of its private placement warrants following the Transactions, subject to certain lock-up periods;

 

   

if the trust account is liquidated, including in the event we are unable to complete an initial business combination within the completion window, the Sponsor has agreed to indemnify us to ensure that the proceeds in the trust account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the trust account on the liquidation date, by the claims of prospective target businesses with which we have entered into an acquisition agreement or claims of any third party (other than our independent public accountants) for services rendered or products sold to us, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the trust account;

 

   

the continued indemnification of our existing directors and officers and the continuation of our directors’ and officers’ liability insurance after the business combination;

 

   

the fact that the Sponsor and officers and directors of SPNV will lose their entire investment in us and will not be reimbursed for any out-of-pocket expenses if an initial business combination is not consummated within the completion window;

 

   

the fact that the Sponsor and the other SPNV Insiders have agreed to waive their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete an initial business combination within the completion window;

 

   

the fact that the Sponsor paid an aggregate of approximately $8,000,000 for its 5,333,333 private placement warrants to purchase shares of SPNV’s Class A common stock and that such private placement warrants will expire worthless if a business combination is not consummated within the completion window;

 

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the fact that the Forward Purchasers have agreed to pay an aggregate of approximately $50,000,000 for an aggregate of 5,000,000 shares of SPNV’s Class A common stock, plus an aggregate of 1,666,667 warrants to purchase one share of SPNV Class A common stock; and

 

   

the fact that at the Closing, the Sponsor, the SPNV Insiders and the SPNV Forward Purchasers will enter into the Registration Rights Agreement with Offerpad Solutions and certain former stockholders of Offerpad, which provides for, among other things, registration rights, including, among other things, customary demand, shelf and piggy-back rights, subject to certain restrictions and customary cut-back provisions with respect to the shares of Offerpad Solutions common stock or warrants to purchase shares of Offerpad Solutions common stock held by certain parties following the Closing.

The personal and financial interests of our officers and directors may have influenced their motivation in identifying and selecting Offerpad, and in ultimately completing a business combination with Offerpad, and may influence their operation of Offerpad Solutions following the business combination. This risk may become more acute as the deadline of October 23, 2022 for completing an initial business combination nears.

In addition, we have not adopted a policy that expressly prohibits our directors, officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. We do not have a policy that expressly prohibits any such persons from engaging for their own account in business activities of the types conducted by us. Accordingly, such persons or entities may have a conflict between their interests and ours.

The SPNV Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Transactions and in recommending to the SPNV stockholders that they vote “FOR” the proposals presented at the special meeting. In considering the recommendations of the SPNV Board to vote for the proposals, its shareholders should consider these interests.

The SPNV Board did not obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the business combination.

The SPNV Board did not obtain a third-party valuation or fairness opinion in connection with its determination to approve the Transactions. In analyzing the business combination, the SPNV Board and management conducted due diligence on Offerpad. The SPNV Board reviewed comparisons of selected financial data of Offerpad with its peers in the industry and the financial terms set forth in the Merger Agreement, and concluded that the business combination was in the best interest of SPNV’s shareholders. The officers and directors of SPNV have substantial experience in evaluating the operating and financial merits of companies from a wide range of industries and concluded that their experience and backgrounds, together with the experience and sector expertise of SPNV’s financial and other advisors, including Jefferies LLC, enabled them to perform the necessary analyses and make determinations regarding the Transactions. Accordingly, investors will be relying solely on the judgment of the SPNV Board in valuing Offerpad’s business and will be assuming the risk that the SPNV Board may not have properly valued such business. The lack of a third-party valuation or fairness opinion may also lead an increased number of stockholders to vote against the proposed business combination or demand redemption of their shares for cash, which could potentially impact SPNV’s ability to consummate the business combination. For more information on the SPNV Board’s decision-making process, see “Proposal No. 1—The Business Combination ProposalSPNV’s Board of Directors’ Reasons for Approval of the Transactions.”

Each of J.P. Morgan and Jefferies has a potential conflict of interest regarding the Business Combination.

As disclosed elsewhere herein, Jefferies and J.P. Morgan served as the underwriters for the SPNV IPO and will collectively receive approximately $14.1 million of deferred underwriting commissions therefrom in connection with the consummation of SPNV’s initial business combination. Jefferies and J.P. Morgan have agreed to waive

 

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their rights to their deferred underwriting commissions held in the Trust Account in the event SPNV does not complete its initial business combination prior to the end of the completion window (subject to any extension period thereof), and in such a circumstance, will not receive any of such funds.

As disclosed under “Proposal No. 1—The Business Combination Proposal—Background of the Transactions”, following the SPNV IPO, SPNV commenced a search for prospective businesses and assets to acquire. Jefferies and J.P. Morgan each provided SPNV with informal assistance during such search process by helping SPNV develop and evaluate its database of more than 400 potential targets, for which neither Jefferies nor J.P. Morgan is entitled to fees.

As described elsewhere herein, Jefferies and J.P. Morgan also are providing certain services in connection with the Transactions, and will receive compensation in connection therewith. Jefferies’ and J.P. Morgan’s receipt of the deferred underwriting commissions is not dependent on their provision of services in connection with the Transactions.

As discussed under “Proposal No. 1—The Business Combination Proposal—Background of the Transactions,” Jefferies is serving as SPNV’s exclusive financial advisor in connection with the Transactions. Pursuant to the terms of Jefferies’ engagement with SPNV, Jefferies has agreed to provide SPNV with financial advice and assistance in connection with the Transactions, including (i) rendering advice on market terms, (ii) negotiating transaction terms, (iii) assisting SPNV with understanding Offerpad’s business and (iv) facilitating discussions between the parties. Upon the consummation of the Transactions, Jefferies will receive the Jefferies Financial Advisory Fee of $10 million. SPNV also has agreed to provide Jefferies with customary expense reimbursement, including fees and expenses of its counsel, and to indemnify it and certain related persons against liabilities arising out of Jefferies’ financial advisory engagement and the Transactions. Neither J.P. Morgan nor any other entity (other than Jefferies) is serving as SPNV’s financial advisor in connection with the Transactions.

Additionally, as discussed under “Proposal No. 1—The Business Combination Proposal—Background of the Transactions,” J.P. Morgan and Jefferies are serving as joint placement agents in connection with the PIPE Investment. Pursuant to the terms of J.P. Morgan’s and Jefferies’ placement agent engagement with SPNV, J.P. Morgan and Jefferies have agreed to assist SPNV in (i) identifying and contacting potential PIPE Investors, (ii) if requested by SPNV, preparing an investor presentation and/or marketing materials for distribution to potential PIPE Investors, (iii) soliciting and receiving offers to purchase shares of Offerpad Solutions Class A common stock pursuant to the PIPE Investment and (iv) SPNV’s negotiation of the financial aspects of the PIPE Investment. In respect of such services, upon the consummation of the Transactions, J.P. Morgan and Jefferies will collectively receive the Placement Fee equal to 3.5% of the aggregate price at which such shares of Offerpad Solutions Class A common stock are sold pursuant to the PIPE Investment, expected to be $7 million, and whether or not the Transactions are consummated, each of J.P. Morgan and Jefferies will receive expense reimbursement customary for a PIPE transaction of this nature (subject to the terms and conditions of their engagement letter with SPNV). SPNV also has agreed to indemnify J.P. Morgan and Jefferies and certain related persons against liabilities arising out of their placement agent engagement or information contained in or omitted from the offering materials in connection with the PIPE Investment.

Because (i) Jefferies and J.P. Morgan will only receive their deferred underwriting commissions upon the consummation of SPNV’s initial business combination during the completion window (subject to any extension period thereof), (ii) Jefferies will only receive the Jefferies Financial Advisory Fee upon the consummation of the Transactions, (iii) J.P. Morgan will receive a financial advisory fee from Offerpad (for J.P. Morgan’s services as Offerpad’s financial advisor in connection with the Transactions) only upon the consummation of the Transactions and (iv) J.P. Morgan and Jefferies will only receive the Placement Fee upon the consummation of the Transactions, Jefferies and J.P. Morgan have an interest in the Transactions being consummated. Such interest may have presented, and may in the future present, a conflict of interest. SPNV’s stockholders should consider the roles of Jefferies and J.P. Morgan in evaluating “Proposal No. 1—The Business Combination Proposal” and the other proposals.

 

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The Sponsor is liable to ensure that proceeds of the trust are not reduced by vendor claims in the event a business combination is not consummated. Such liability may have influenced the Sponsor’s decision to approve the Transactions.

If the Transactions or another business combination are not consummated by SPNV within the completion window, the Sponsor will be liable under certain circumstances to ensure that the proceeds in the trust account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by SPNV for services rendered or contracted for or products sold to SPNV. If SPNV consummates a business combination, including the Transactions, on the other hand, SPNV will be liable for all such claims. Neither SPNV nor the Sponsor has any reason to believe that the Sponsor will not be able to fulfill its indemnity obligations to SPNV. Please see the section entitled “Other Information Related to SPNVLiquidation if no Business Combination” for further information.

These obligations of the Sponsor may have influenced the Sponsor’s decision to approve the Transactions and to continue to pursue such business combination. Each of Messrs. Rascoff, Klabin, Reid and Clifton has an indirect economic interest in the founder shares and private placement warrants purchased by the Sponsor as a result of his or her membership interest in the Sponsor. In addition, the forward purchase agreements, pursuant to which Ancient 1604 LLC and 75 and Sunny LP, affiliates of Alexander M. Klabin and Spencer Rascoff, respectively, our Co-Chairs, have agreed to purchase SPNV Class A common stock in an aggregate share amount equal to 5,000,000 shares of SPNV Class A common stock, plus an aggregate of 1,666,667 warrants to purchase one share of SPNV Class A common stock at $11.50 per share, may have influenced their decision to approve the Transactions and to continue to pursue such business combination. In considering the recommendations of the SPNV Board to vote for the business combination proposal and the other proposals described in this proxy statement/prospectus, SPNV’s stockholders should consider these interests.

The exercise of SPNV’s directors’ and officers’ discretion in agreeing to changes or waivers in the terms of the Transactions may result in a conflict of interest when determining whether such changes to the terms of the Transactions or waivers of conditions are appropriate and in SPNV’s stockholders’ best interest.

In the period leading up to Closing, events may occur that, pursuant to the Merger Agreement, would require SPNV to agree to amend the Merger Agreement, to consent to certain actions taken by Offerpad or to waive rights that SPNV is entitled to under, or conditions of, the Merger Agreement. Such events could arise because of changes in the course of Offerpad’s business, a request by Offerpad to undertake actions that would otherwise be prohibited by the terms of the Merger Agreement or the occurrence of other events that would have a material adverse effect on Offerpad’s business and would entitle SPNV to terminate the Merger Agreement. In any of such circumstances, it would be at SPNV’s discretion, acting through the SPNV Board, to grant its consent or waive those rights or conditions. The existence of the financial and personal interests of the directors described in the preceding risk factors (and described elsewhere in this proxy statement/prospectus) may result in a conflict of interest on the part of one or more of the directors between what he, she or they may believe is best for SPNV and what he, she or they may believe is best for himself, herself or themselves in determining whether or not to take the requested action. As of the date of this proxy statement/prospectus, SPNV does not believe there will be any material changes or waivers that SPNV’s directors and officers would be likely to make after the mailing of this proxy statement/prospectus. While certain changes could be made without further shareholder approval, SPNV will circulate a new or amended proxy statement/prospectus or supplement thereto if changes to the terms of the Transactions that would have a material impact on its stockholders are required prior to the vote on the business combination proposal.

Unless an extension of the completion window is sought, if SPNV is unable to complete the Transactions or another initial business combination by October 23, 2022, SPNV will cease all operations except for the purpose of winding up, redeeming 100% of the outstanding public shares and, subject to the approval of its remaining stockholders and the SPNV Board, dissolving and liquidating. In such event, third parties may

 

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bring claims against SPNV and, as a result, the proceeds held in the trust account could be reduced and the per-share liquidation price received by stockholders could be less than $10.00 per share.

Under the terms of SPNV’s current certificate of incorporation, SPNV must complete a business combination before the end of the completion window, or SPNV must cease all operations except for the purpose of winding up, redeeming 100% of the outstanding public shares and, subject to the approval of its remaining stockholders and the SPNV Board, dissolving and liquidating. In such event, third parties may bring claims against SPNV. Although SPNV has obtained waiver agreements from certain vendors and service providers it has engaged and owes money to, and the prospective target businesses it has negotiated with, whereby such parties have waived any right, title, interest or claim of any kind they may have in or to any monies held in the trust account, there is no guarantee that they or other vendors who did not execute such waivers will not seek recourse against the trust account notwithstanding such agreements. Furthermore, there is no guarantee that a court will uphold the validity of such agreements. Accordingly, the proceeds held in the trust account could be subject to claims which could take priority over those of SPNV’s public stockholders. If SPNV is unable to complete a business combination within the completion window, the Sponsor has agreed that it will be liable to SPNV if and to the extent any claims by a third party (other than our independent registered public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have 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 account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third party claims. We have not independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and believe that the Sponsor’s only assets are securities of our company and, therefore, Sponsor may not be able to satisfy those obligations. We have not asked the Sponsor to reserve for such obligations. As a result, if any such claims were successfully made against the trust account, the funds available for our initial business combination and redemptions could be reduced to less than $10.00 per public share. In such event, we may not be able to complete our initial business combination, and you would receive such lesser amount per share in connection with any redemption of your public shares. None of our officers will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

Additionally, if SPNV is forced to file a bankruptcy case or an involuntary bankruptcy case is filed against it which is not dismissed, or if SPNV otherwise enters compulsory or court supervised liquidation, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in its bankruptcy estate and subject to the claims of third parties with priority over the claims of its stockholders. To the extent any bankruptcy claims deplete the trust account, SPNV may not be able to return to its public stockholders at least $10.00 per share.

SPNV’s stockholders may be held liable for claims by third parties against SPNV to the extent of distributions received by them.

If SPNV is unable to complete the Transactions or another business combination within the completion window, SPNV will (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible but not more than 10 business days thereafter, redeem 100% of the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our franchise and income taxes (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 public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any); and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject

 

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in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In such case, our public stockholders may receive only $10.00 per share, or less than $10.00 per share, on the redemption of their shares, and our warrants will expire worthless. See “— Unless an extension of the completion window is sought, if SPNV is unable to complete the Transactions or another initial business combination by October 23, 2022, SPNV will cease all operations except for the purpose of winding up, redeeming 100% of the outstanding public shares and, subject to the approval of its remaining stockholders and the Board, dissolving and liquidating. In such event, third parties may bring claims against SPNV and, as a result, the proceeds held in the trust account could be reduced and the per share liquidation price received by stockholders could be less than $10.00 per share” and other risk factors in this section.

SPNV cannot assure you that it will properly assess all claims that may be potentially brought against SPNV. As such, SPNV’s stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of its stockholders may extend well beyond the third anniversary of the date of distribution. Accordingly, SPNV cannot assure you that third parties will not seek to recover from its stockholders amounts owed to them by SPNV.

If SPNV is forced to file a bankruptcy case or an involuntary bankruptcy case is filed against it which is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover all amounts received by SPNV’s stockholders. Furthermore, because SPNV intends to distribute the proceeds held in the trust account to its public stockholders promptly after the expiration of the time period to complete a business combination, this may be viewed or interpreted as giving preference to its public stockholders over any potential creditors with respect to access to or distributions from its assets. Furthermore, the SPNV Board may be viewed as having breached their fiduciary duties to SPNV’s creditors and/or may have acted in bad faith, and thereby exposing itself and SPNV to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors. SPNV cannot assure you that claims will not be brought against it for these reasons.

Activities taken by existing SPNV stockholders to increase the likelihood of approval of the business combination proposal and the other proposals described in this proxy statement/prospectus could have a depressive effect on SPNV’s securities.

At any time prior to the special meeting, during a period when they are not then aware of any material nonpublic information regarding SPNV or its securities, the Sponsor, directors, officers, advisors or any of their respective affiliates and/or their respective affiliates may purchase shares from institutional and other investors who vote, or indicate an intention to vote, against the business combination proposal, or execute agreements to purchase such shares from such investors in the future, or they may enter into transactions with such investors and others to provide them with incentives to acquire shares of SPNV’s common stock or vote their shares in favor of the business combination proposal. The purpose of such share purchases and other transactions would be to increase the likelihood of satisfaction of the requirements to consummate the Transactions where it appears that such requirements would otherwise not be met. Entering into any such arrangements may have a depressive effect on SPNV’s securities. For example, as a result of these arrangements, an investor or holder may have the ability to effectively purchase shares at a price lower than the market price and may therefore be more likely to sell the shares they own, either prior to or immediately after the special meeting.

SPNV’s stockholders will experience dilution as a consequence of, among other transactions, the issuance of Offerpad Solutions common stock as consideration in the business combination, the PIPE Investment, the SPNV Forward Purchase and due to future issuances pursuant to our 2021 Plan and the ESPP. Having a minority share position in Offerpad Solutions may reduce the influence that SPNV’s current stockholders have on the management of Offerpad Solutions

It is anticipated that, upon the Closing: (i) existing stockholders of Offerpad will own approximately 74.9% of Offerpad Solutions on a fully diluted net exercise basis; (ii) SPNV’s public stockholders (other than the PIPE

 

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Investors) will retain an ownership interest of approximately 13.4% in Offerpad Solutions on a fully diluted net exercise basis; (iii) the PIPE Investors will own approximately 6.7% of Offerpad Solutions on a fully diluted net exercise basis; and (iv) the Sponsor (and its affiliates, including the purchasers pursuant to the SPNV Forward Purchase) will own approximately 5.0% of Offerpad Solutions on a fully diluted net exercise basis. These indicative levels of ownership interest: (i) exclude the impact of the shares of SPNV’s Class A common stock underlying warrants and (ii) assume that no public stockholder exercises redemption rights with respect to its shares for a pro rata portion of the funds in the trust account.

In addition, Offerpad employees, directors and consultants hold, and after the business combination, may be granted, equity awards under the 2021 Plan and/or purchase rights under the ESPP. You will experience additional dilution when those equity awards and purchase rights become vested and settled or exercisable, as applicable, for shares of Offerpad Solutions common stock.

The issuance of additional shares of Offerpad Solutions common stock will significantly dilute the equity interests of existing holders of SPNV securities and may adversely affect prevailing market prices for Offerpad Solutions common stock or public warrants. Having a minority ownership interest in Offerpad Solutions may reduce the influence that SPNV’s current public stockholders have on the management of Offerpad Solutions

The Sponsor, existing stockholders of Offerpad and the PIPE Investors will beneficially own a significant equity interest in Offerpad Solutions and may take actions that conflict with your interests.

The interests of the Sponsor, existing stockholders of Offerpad and the PIPE Investors may not align with the interests of SPNV and its other stockholders. The Sponsor, certain existing stockholders of Offerpad and the PIPE Investors are each in the business of making investments in companies and may acquire and hold interests in businesses that compete directly or indirectly with Offerpad Solutions. The Sponsor, existing stockholders of Offerpad and the PIPE Investors, and their respective affiliates, may also pursue acquisition opportunities that may be complementary to SPNV’s business and, as a result, those acquisition opportunities may not be available to us. The Proposed Charter provides that the Identified Persons (as defined therein) may engage in competitive businesses and renounces any entitlement to certain corporate opportunities offered to such Identified Persons that are not expressly offered to them in their capacities as directors or officers of SPNV. The Proposed Charter also provides that the Identified Persons do not have any fiduciary duty to refrain from engaging, directly or indirectly, in the same or similar business activities or lines of business as SPNV or any of its affiliates or subsidiaries.

We may issue additional shares of Offerpad Solutions common stock or other equity securities without your approval, which would dilute your ownership interests and may depress the market price of your shares.

We may issue additional shares of Offerpad Solutions common stock or other equity securities of equal or senior rank in the future in connection with, among other things, future acquisitions, repayment of outstanding indebtedness or under our 2021 Plan or ESPP, without stockholder approval, in a number of circumstances.

Our issuance of additional shares of Offerpad Solutions common stock or other equity securities of equal or senior rank could have the following effects:

 

   

your proportionate ownership interest in SPNV will decrease;

 

   

the relative voting strength of each previously outstanding share of SPNV’s common stock may be diminished; or

 

   

the market price of our shares of SPNV stock may decline.

SPNV has no operating history and its results of operations and those of Offerpad Solutions may differ significantly from the unaudited pro forma financial information included in this proxy statement/prospectus.

SPNV is a blank check company with no operating history or results.

 

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This proxy statement/prospectus includes unaudited pro forma condensed combined financial information for Offerpad Solutions. The unaudited pro forma condensed combined statement of operations of Offerpad Solutions combines the audited historical condensed balance sheet of SPNV as of December 31, 2020 with the audited historical consolidated balance sheet of Offerpad as of December 31, 2020, and gives pro forma effect to the business combination, the PIPE Investment and the SPNV Forward Purchase Agreement, as if they had been consummated as of that date. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2020 combine the historical statement of operations of SPNV and the historical consolidated statement of operations of Offerpad for such period on a pro forma basis as if the business combination, the PIPE Investment and the transactions contemplated by the SPNV Forward Purchase Agreement had been consummated on January 1, 2020, the beginning of the earliest period presented.

The unaudited pro forma condensed combined financial information is presented for illustrative purposes only, are based on certain assumptions, address a hypothetical situation and reflect limited historical financial data. Therefore, the unaudited pro forma condensed combined financial information is not necessarily indicative of the results of operations and financial position that would have been achieved had the business combination been consummated on the dates indicated above, or the future consolidated results of operations or financial position of Offerpad Solutions. Accordingly, Offerpad Solutions’ business, assets, cash flows, results of operations and financial condition may differ significantly from those indicated by the unaudited pro forma condensed combined financial information included in this document. For more information, please see the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.”

SPNV has identified a material weakness in its internal control over financial reporting. This material weakness could continue to adversely affect its ability to report its results of operations and financial condition accurately and in a timely manner.

Following the issuance of the “Staff Statement on Accounting and Reporting Considerations for Warrants issued by Special Purpose Acquisition Companies” by the staff of the SEC (the “SEC Staff Statement”), after consultation with SPNV’s independent registered public accounting firm, SPNV’s management and audit committee concluded that, in light of the SEC Staff Statement, it was appropriate to restate previously issued and audited financial statements as of and for the period ended December 31, 2020.

SPNV’s management is responsible for establishing and maintaining adequate internal control over financial reporting designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. SPNV’s management is likewise required, on a quarterly basis, to evaluate the effectiveness of its internal controls and to disclose any changes and material weaknesses identified through such evaluation of those internal controls. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of SPNV’s annual or interim financial statements will not be prevented or detected on a timely basis.

As described elsewhere in this proxy statement/prospectus, SPNV identified a material weakness in its internal control over financial reporting related to the accounting for a significant and unusual transaction related to the warrants it issued in connection with its initial public offering in October 2020. As a result of this material weakness, SPNV’s management has concluded that its internal control over financial reporting was not effective as of December 31, 2020. This material weakness resulted in a material misstatement of SPNV’s derivative liabilities, change in fair value of derivative liabilities, Class A common stock subject to possible redemption, accumulated deficit and related financial disclosures for the period from August 31, 2020 (inception) through December 31, 2020. For a discussion of management’s consideration of the material weakness identified related to SPNV’s accounting for a significant and unusual transaction related to the warrants SPNV issued in connection with the October 2020 initial public offering, see “SPNV’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Note 2—Restatement of Previously Issued Financial Statements” to SPNV’s audited financial statements.

 

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SPNV has concluded that its internal control over financial reporting was ineffective as of December 31, 2020 because material weaknesses existed in SPNV’s internal control over financial reporting. SPNV has taken a number of measures to remediate the material weaknesses described herein; however, if it is unable to remediate its material weaknesses in a timely manner or SPNV identifies additional material weaknesses, it may be unable to provide required financial information in a timely and reliable manner, and SPNV may incorrectly report financial information. Likewise, if SPNV’s financial statements are not filed on a timely basis, SPNV could be subject to sanctions or investigations by the stock exchange on which SPNV’s common stock is listed, the SEC or other regulatory authorities. . In either case, there could result a material adverse effect on SPNV’s business. The existence of material weaknesses or significant deficiencies in internal control over financial reporting could adversely affect SPNV’s reputation or investor perceptions of SPNV, which could have a negative effect on the trading price of SPNV’s stock. In addition, SPNV will incur additional costs to remediate material weaknesses in its internal control over financial reporting.

Furthermore, as a result of such material weakness, the change in accounting for the warrants, and other matters raised or that may in the future be raised by the SEC, SPNV faces potential for litigation or other disputes which may include, among others, claims invoking the federal and state securities laws, contractual claims or other claims arising from the material weaknesses in SPNV’s internal control over financial reporting and the preparation of SPNV’s financial statements. As of the date of this proxy statement/prospectus, SPNV has no knowledge of any such litigation or dispute. However, SPNV can provide no assurance that such litigation or dispute will not arise in the future. Any such litigation or dispute, whether successful or not, could have a material adverse effect on SPNV’s business, results of operations and financial condition or its ability to complete a Business Combination.

SPNV can give no assurance that the measures it has taken and plans to take in the future will remediate the material weakness identified or that any additional material weaknesses or restatements of financial results will not arise in the future due to a failure to implement and maintain adequate internal control over financial reporting or circumvention of these controls. In addition, even if SPNV is successful in strengthening its controls and procedures, in the future those controls and procedures may not be adequate to prevent or identify irregularities or errors or to facilitate the fair presentation of its financial statements.

SPNV’s warrants and forward purchase agreements are accounted for as derivative liabilities with changes in fair value each period included in earnings, which may have an adverse effect on the market price of SPNV’s Class A common stock or may make it more difficult for SPNV to consummate an initial business combination.

SPNV accounts for its warrants and forward purchase agreements as derivative liabilities. At each reporting period (1) the accounting treatment of the warrants and forward purchase agreements will be re-evaluated for proper accounting treatment as a liability or equity and (2) the fair value of the liability of the public warrants and private placement warrants and the forward purchase agreements will be remeasured and the change in the fair value of the liability will be recorded as other income (expense) in SPNV’s income statement. The impact of changes in fair value on earnings may have an adverse effect on the market price of SPNV’s Class A common stock. In addition, potential targets may seek a special purpose acquisition company that does not have warrants and forward purchase agreements that are accounted for as a derivative liabilities, which may make it more difficult for SPNV to consummate an initial business combination with a target business.

 

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The announcement of the proposed business combination could disrupt Offerpad’s relationships with its clients, providers, business partners and others, as well as its operating results and business generally.

Whether or not the business combination and related transactions are ultimately consummated, as a result of uncertainty related to the proposed transactions, risks relating to the impact of the announcement of the business combination on Offerpad’s business include the following:

 

   

its employees may experience uncertainty about their future roles, which might adversely affect Offerpad’s ability to retain and hire key personnel and other employees;

 

   

clients, providers, business partners and other parties with which Offerpad maintains business relationships may experience uncertainty about its future and seek alternative relationships with third parties, seek to alter their business relationships with Offerpad or fail to extend an existing relationship with Offerpad; and

 

   

Offerpad has expended and will continue to expend significant costs, fees and expenses for professional services and transaction costs in connection with the proposed business combination.

If any of the aforementioned risks were to materialize, they could lead to significant costs which may impact Offerpad’s results of operations and cash available to fund its business.

Offerpad’s financial forecasts, which were presented to the SPNV Board and are included in this proxy statement/prospectus, may not prove accurate.

In connection with the Transactions, and as discussed in further detail below under “Certain Forecasted Financial Information for Offerpad”, Offerpad provided SPNV management with internally prepared forecasts, which SPNV management then shared with the SPNV Board. The forecasts were based on numerous variables and assumptions known to Offerpad at the time of preparation. Such variables and assumptions are inherently uncertain and many are beyond the control of Offerpad. Important factors that may affect actual results and cause the forecasts to not be achieved include, but are not limited to, risks and uncertainties relating to the businesses of Offerpad (including its ability to achieve strategic goals, objectives and targets over applicable periods), industry performance, the competitive environment, changes in technology, general business and economic conditions. Various assumptions underlying the forecasts may prove to not have been, or may no longer be, accurate. The forecasts may not be realized, and actual results may be significantly higher or lower than projected in the forecasts. The forecasts also reflect assumptions as to certain business strategies or plans that are subject to change. As a result, the inclusion of such forecasts in this proxy statement/prospectus should not be relied on as “guidance” or otherwise predictive of actual future events, and actual results may differ materially from the forecasts.

SPNV and Offerpad have incurred and expect to incur significant costs associated with the business combination. Whether or not the business combination is completed, the incurrence of these costs will reduce the amount of cash available to be used for other corporate purposes by SPNV if the business combination is not completed.

SPNV and Offerpad expect to incur significant transaction and transition costs associated with the business combination and operating as a public company following the Closing. SPNV and Offerpad may also incur additional costs to retain key employees. Certain transaction expenses incurred in connection with the Merger Agreement (including the business combination), including all legal, accounting, consulting, investment banking and other fees, expenses and costs, will be paid by Offerpad Solutions following the Closing. As disclosed in Note 3(E) to the Unaudited Pro Forma Condensed Combined Financial Information, expected transaction costs in consummating the business combination and related transactions are approximately $45.9 million, approximately $13.8 million of which are attributable to SPNV and approximately $26.0 million of which are attributable to Offerpad. Even if the business combination is not completed, SPNV expects to incur approximately $5.5 million in expenses. These expenses will reduce the amount of cash available to be used for other corporate purposes by SPNV if the business combination is not completed.

 

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Warrants will become exercisable for Offerpad Solutions Class A common stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.

Outstanding warrants to purchase an aggregate of up to 20,116,667 shares of Offerpad Solutions Class A common stock will become exercisable in accordance with the terms of the Warrant Agreement governing those securities. Further, an additional 1,666,667 warrants may be issued pursuant to the SPNV Forward Purchase Agreement, which would be exercisable to purchase an aggregate 1,666,667 shares of Offerpad Solutions Class A common stock. These warrants will become exercisable at any time commencing on the later of 30 days after the completion of the business combination and 12 months from the closing of the SPNV IPO. The exercise price of these warrants will be $11.50 per share subject to adjustment as described in Description of Securities—Redemption of Warrants. To the extent such warrants are exercised, additional shares of Offerpad Solutions Class A common stock will be issued, which will result in dilution to the holders of Offerpad Solutions common stock and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market or the fact that such warrants may be exercised could adversely affect the market price of Offerpad Solutions Class A common stock. However, there is no guarantee that the public warrants will ever be in the money prior to their expiration, and as such, the warrants may expire worthless. See “— Even if SPNV consummates the business combination, there is no guarantee that the public warrants will ever be in the money, and they may expire worthless.”

Even if SPNV consummates the business combination, there is no guarantee that the public warrants will ever be in the money, and they may expire worthless.

The exercise price for SPNV public warrants is $11.50 per share of SPNV’s Class A common stock, subject to adjustment as described in Description of Securities—Redemption of Warrants. There is no guarantee that the public warrants will ever be in the money prior to their expiration, and as such, the warrants may expire worthless. If SPNV is unable to complete an initial business combination, SPNV’s warrants may expire worthless.

We are not registering the shares of Offerpad Solutions Class A common stock issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time, and such registration may not be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise its warrants and causing such warrants to expire worthless.

We are not registering the shares of Offerpad Solutions Class A common stock issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time. However, under the terms of the Warrant Agreement, we have agreed, as soon as practicable, but in no event later than 20 business days after the closing of our initial business combination, to use our commercially reasonable efforts to file, and within 60 business days following our initial business combination have declared effective, a registration statement under the Securities Act covering the issuance of such shares and maintain a current prospectus relating to the shares of SPNV’s Class A common stock issuable upon exercise of the warrants, until the expiration of the warrants in accordance with the provisions of the Warrant Agreement. We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth in the registration statement or prospectus, the financial statements contained or incorporated by reference therein are not current or correct or the SEC issues a stop order. If the shares issuable upon exercise of the warrants are not registered under the Securities Act, we will be required to permit holders to exercise their warrants on a cashless basis. However, no warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their 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. Notwithstanding the above, if Offerpad Solutions Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration

 

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statement, but we will use our best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. In no event will we be required to net cash settle any warrant, or issue securities or other compensation in exchange for the warrants in the event that we are unable to register or qualify the shares underlying the warrants under applicable state securities laws and no exemption is available. If the issuance of the shares upon exercise of the warrants is not so registered or qualified or exempt from registration or qualification, the holder of such warrant shall not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In such event, holders who acquired their warrants as part of a purchase of units will have paid the full unit purchase price solely for the shares of Offerpad Solutions Class A common stock included in the units. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying shares of Offerpad Solutions Class A common stock for sale under all applicable state securities laws.

Our ability to successfully effect the business combination and to be successful thereafter will be dependent upon the efforts of certain key personnel, including the key personnel of Offerpad whom we expect to stay with the post-combination business following the business combination. The loss of key personnel could negatively impact the operations and profitability of our post-combination business and its financial condition could suffer as a result.

Our ability to successfully effect the business combination is dependent upon the efforts of our key personnel, including the key personnel of Offerpad. Although some key personnel may remain with the post-combination business in senior management or advisory positions following the business combination, it is possible that we will lose some key personnel, the loss of which could negatively impact the operations and profitability of our post-combination business. We anticipate that some or all of the management of Offerpad will remain in place.

Offerpad’s success depends to a significant degree upon the continued contributions of senior management, certain of whom would be difficult to replace. Departure by certain of Offerpad’s officers could have a material adverse effect on Offerpad’s business, financial condition, or operating results.

Uncertainty about the effect of the business combination on employees and third parties may have an adverse effect on SPNV and Offerpad. These uncertainties may impair our or Offerpad’s ability to retain and motivate key personnel and could cause third parties that deal with any of us or them to defer entering into contracts or making other decisions or seek to change existing business relationships. If key employees depart because of uncertainty about their future roles and the potential complexities of the business combination, our or Offerpad’s business could be harmed.

Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our financial condition and results of operations.

We will be subject to income taxes in the United States, and our tax liabilities will be subject to the allocation of expenses in differing jurisdictions. Our future effective tax rates could be subject to volatility or adversely affected by a number of factors, including:

 

   

changes in the valuation of our deferred tax assets and liabilities;

 

   

expected timing and amount of the release of any tax valuation allowances;

 

   

tax effects of stock-based compensation;

 

   

costs related to intercompany restructurings;

 

   

changes in tax laws, regulations or interpretations thereof; or

 

   

lower than anticipated future earnings in jurisdictions where we have lower statutory tax rates and higher than anticipated future earnings in jurisdictions where we have higher statutory tax rates.

In addition, we may be subject to audits of our income, sales and other transaction taxes by taxing authorities. Outcomes from these audits could have an adverse effect on our financial condition and results of operations.

 

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If SPNV’s due diligence investigation of the Offerpad business was inadequate, then stockholders of SPNV following the business combination could lose some or all of their investment.

Even though SPNV and its advisors conducted a due diligence investigation of the Offerpad business, SPNV cannot be sure that this diligence uncovered all material issues that may be present inside the Offerpad business, or that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of the Offerpad business and outside of its control will not later arise. If SPNV’s due diligence investigation of the Offerpad business was inadequate, then the performance of Offerpad Solutions following the Closing could suffer and stockholders could lose some or all of their investment.

There are risks to our public stockholders who are not affiliates of the Sponsor of becoming stockholders of Offerpad Solutions through the business combination rather than through an underwritten public offering, including no independent due diligence review by an underwriter.

Our stockholders should be aware that there are risks associated with Offerpad Solutions becoming publicly traded through a business combination with SPNV (a special purpose acquisition company) instead of through an underwritten offering, including that investors will not receive the benefit of any independent review of Offerpad’s finances and operations, including its projections.

Underwritten public offerings of securities are subject to a due diligence review of the issuer by the underwriters to satisfy duties under the Securities Act, the rules of the Financial Industry Regulatory Authority, Inc. (FINRA) and the rules of the national securities exchange on which such securities will be listed. Additionally, underwriters conducting such public offerings are subject to liability for any material misstatements or omissions in a registration statement filed in connection with the public offering and undertake a due diligence review process in order to establish a due diligence defense against liability for claims under the federal securities laws. Our stockholders must rely on the information in this proxy statement/prospectus and will not have the benefit of an independent review and investigation of the type typically performed by underwriters in a public securities offering. While sponsors, private investors and management in a business combination undertake financial, legal and other due diligence, it is not necessarily the same review or analysis that would be undertaken by underwriters in an underwritten public offering and, therefore, there could be a heightened risk of an incorrect valuation of the business or material misstatements or omissions in this proxy statement/prospectus.

There could also be more volatility in the near-term trading of Offerpad Solutions’ Class A common stock following the consummation of the business combination as compared to an underwritten public offering of its common stock, including as a result of the lack of a lock-up agreement between any underwriter and certain investors. For example, the PIPE Investors will not enter into lock-up agreements restricting the sale of shares of Class A common stock acquired by the PIPE Investors in connection with the consummation of the business combination following the consummation of the business combination, which restriction on resales might typically be in effect following an initial underwritten public offering of common stock. Our PIPE Investors will instead have the benefit of a resale registration statement that we are required to file with the SEC within 30 calendar days after the consummation of the business combination and to use commercially reasonable efforts to have such registration statement declared effective as soon as practicable after the filing thereof, but no later than the earlier of (i) the 65th calendar day (or 90th calendar day if the SEC notifies us that it will “review” the registration statement) following the Closing and (ii) the 5th business day after the date we are notified by the SEC that the registration statement will not be reviewed or will not be subject to further review. The sale or possibility of sale of these shares could have the effect of increasing the volatility in the market price of Offerpad Solutions’ Class A common stock and/or lead to declines in the market price of Offerpad Solutions’ Class A common stock, as compared to an underwritten public offering.

 

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Following the Closing, Offerpad Solutions’ only significant asset will be its ownership interest in the Offerpad business and such ownership may not be sufficiently profitable or valuable to enable Offerpad Solutions to pay any dividends on Offerpad Solutions common stock or satisfy Offerpad Solutions’ other financial obligations.

Following the Closing, Offerpad Solutions will have no direct operations and no significant assets other than its ownership interest in the Offerpad business. Offerpad Solutions will depend on the Offerpad business for distributions, loans and other payments to generate the funds necessary to meet its financial obligations, including its expenses as a publicly traded company and to pay any dividends with respect to Offerpad Solutions common stock. The earnings from, or other available assets of, the Offerpad business may not be sufficient to pay dividends or make distributions or loans to enable Offerpad Solutions to pay any dividends on Offerpad Solutions common stock or satisfy our other financial obligations.

This lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to the business combination. Please see the sections titled “SPNV’s Management’s Discussion and Analysis of Financial Condition and Results of OperationsLiquidity and Capital Resources” and “Offerpad’s Management’s Discussion and Analysis of Financial Condition and Results of OperationsLiquidity and Capital Resources” for more information.

Following the Closing, Offerpad Solutions may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on Offerpad Solutions’s financial condition, results of operations and its stock price, which could cause you to lose some or all of your investment.

Although SPNV has conducted due diligence on the Offerpad business, SPNV cannot assure you that this diligence will surface all material issues that may be present in such business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of the Offerpad business and outside of SPNV’s and Offerpad’s control will not later arise. As a result of these factors, Offerpad Solutions may be forced to later write-down or write-off assets, restructure operations, or incur impairment or other charges that could result in losses. Even if SPNV’s due diligence successfully identifies certain risks, unexpected risks may arise, and previously known risks may materialize in a manner not consistent with SPNV’s preliminary risk analysis. If any of these risks materialize, this could have a material adverse effect on Offerpad Solutions’s financial condition and results of operations and could contribute to negative market perceptions about our securities or Offerpad Solutions

Accordingly, any of SPNV’s stockholders or warrant holders who choose to remain stockholders or warrant holders of Offerpad Solutions following the business combination could suffer a reduction in the value of their shares and warrants. Such shareholders or warrant holders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our directors or officers of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the registration statement or proxy statement/prospectus relating to the business combination contained an actionable material misstatement or material omission.

A market for SPNV’s securities may not continue, which would adversely affect the liquidity and price of SPNV’s (Offerpad Solutions’) securities.

SPNV is currently a blank check company and there has not been a public market for shares of Offerpad common stock since it is a private company. Following the business combination, the price of SPNV’s (Offerpad Solutions’) securities may fluctuate significantly due to the market’s reaction to the business combination and general market and economic conditions. An active trading market for Offerpad Solutions’ securities following the business combination may never develop or, if developed, it may not be sustained. In addition, the price of

 

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Offerpad Solutions’ securities after the business combination can vary due to general economic conditions and forecasts, Offerpad Solutions’ general business condition and the release of Offerpad Solutions’ financial reports.

In the absence of a liquid public trading market:

 

   

you may not be able to liquidate your investment in shares of SPNV’s Class A common stock;

 

   

you may not be able to resell your shares of SPNV’s Class A common stock at or above the price attributed to them in the business combination;

 

   

the market price of shares of SPNV’s Class A common stock may experience significant price volatility; and

 

   

there may be less efficiency in carrying out your purchase and sale orders.

Additionally, if SPNV’s securities become delisted from the NYSE for any reason, and are quoted on the OTC Bulletin Board, an inter-dealer automated quotation system for equity securities that is not a national securities exchange, the liquidity and price of SPNV’s securities may be more limited than if SPNV was quoted or listed on the NYSE or another national securities exchange. You may be unable to sell your securities unless a market can be established or sustained.

If the business combination’s benefits do not meet the expectations of investors, stockholders or financial analysts, the market price of Offerpad Solutions Class A common stock may decline.

If the benefits of the business combination do not meet the expectations of investors, stockholders or securities analysts, the market price of Offerpad Solutions’s Class A common stock following the Closing may decline. The market price of Offerpad Solutions Class A common stock at the time of the business combination may vary significantly from the market price of SPNV’s Class A common stock on the date the Merger Agreement was executed, the date of this proxy statement/prospectus, or the date on which SPNV’s stockholders vote on the business combination.

In addition, following the business combination, fluctuations in the price of SPNV’s securities could contribute to the loss of all or part of your investment. Immediately prior to the business combination, there has not been a public market for stock relating to the Offerpad business and trading in shares of SPNV’s Class A common stock has not been active. Accordingly, the valuation ascribed to the Offerpad business and SPNV’s Class A common stock in the business combination may not be indicative of the price that will prevail in the trading market following the business combination.

The trading price of Offerpad Solutions Class A common stock following the business combination may fluctuate substantially and may be lower than the current market price of SPNV’s Class A common stock. This may be especially true for companies like ours with a small public float. If an active market for SPNV’s securities develops and continues, the trading price of SPNV’s securities following the business combination could be volatile and subject to wide fluctuations. The trading price of Offerpad Solutions Class A common stock following the business combination will depend on many factors, including those described in this “Risk Factors” section, many of which are beyond Offerpad Solutions’s control and may not be related to Offerpad Solutions’s operating performance. These fluctuations could cause you to lose all or part of your investment in Offerpad Solutions Class A common stock since you might be unable to sell your shares at or above the price attributed to them in the business combination. Any of the factors listed below could have a material adverse effect on your investment in SPNV’s securities and SPNV’s securities may trade at prices significantly below the price you paid for them. In such circumstances, the trading price of SPNV’s securities may not recover and may experience a further decline.

Factors affecting the trading price of Offerpad Solutions’ securities following the business combination may include:

 

   

actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to ours;

 

   

changes in the market’s expectations about our operating results;

 

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the public’s reaction to our press releases, other public announcements and filings with the SEC;

 

   

speculation in the press or investment community;

 

   

actual or anticipated developments in Offerpad Solutions’s business, competitors’ businesses or the competitive landscape generally;

 

   

the operating results failing to meet the expectation of securities analysts or investors in a particular period;

 

   

changes in financial estimates and recommendations by securities analysts concerning us or the market in general;

 

   

operating and stock price performance of other companies that investors deem comparable to ours;

 

   

changes in laws and regulations affecting Offerpad Solutions’s business;

 

   

commencement of, or involvement in, litigation involving Offerpad Solutions;

 

   

changes in Offerpad Solutions’s capital structure, such as future issuances of securities or the incurrence of additional debt;

 

   

the volume of Offerpad Solutions Class A common stock available for public sale;

 

   

any major change in Offerpad Solutions’s board of directors or management;

 

   

sales of substantial amounts of Offerpad Solutions common stock by our directors, officers or significant stockholders or the perception that such sales could occur;

 

   

general economic and political conditions such as recessions, interest rates, “trade wars,” pandemics (such as COVID-19) and acts of war or terrorism; and

 

   

other risk factors listed under “Risk Factors.

Broad market and industry factors may materially harm the market price of Offerpad Solutions’ securities irrespective of Offerpad Solutions’ operating performance. The stock market in general and the NYSE have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. The trading prices and valuations of these stocks, and of Offerpad Solutions’ securities, may not be predictable. A loss of investor confidence in the market for the stocks of other companies which investors perceive to be similar to Offerpad Solutions’ could depress Offerpad Solutions’ stock price regardless of Offerpad Solutions’ business, prospects, financial conditions or results of operations. Broad market and industry factors, including, most recently, the impact of the novel coronavirus, COVID-19, and any other global pandemics, as well as general economic, political and market conditions such as recessions or interest rate changes, may seriously affect the market price of Offerpad Solutions Class A common stock, regardless of Offerpad Solutions’ actual operating performance. These fluctuations may be even more pronounced in the trading market for our stock shortly following the business combination. A decline in the market price of Offerpad Solutions’ securities also could adversely affect Offerpad Solutions’ ability to issue additional securities and Offerpad Solutions’ ability to obtain additional financing in the future.

In addition, in the past, following periods of volatility in the overall market and the market prices of particular companies’ securities, securities class action litigations have often been instituted against these companies. Litigation of this type, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources. Any adverse determination in any such litigation or any amounts paid to settle any such actual or threatened litigation could require that we make significant payments.

Offerpad Solutions’ quarterly operating results may fluctuate significantly and could fall below the expectations of securities analysts and investors due to a variety of factors, some of which are beyond Offerpad Solutions’ control, resulting in a decline in Offerpad Solutions’ stock price.

 

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If, following the business combination, securities or industry analysts do not publish or cease publishing research or reports about Offerpad Solutions, its business, or its market, or if they change their recommendations regarding the Offerpad Solutions Class A common stock adversely, then the price and trading volume of Offerpad Solutions Class A common stock could decline.

The trading market for Offerpad Solutions Class A common stock will be influenced by the research and reports that industry or securities analysts may publish about us, Offerpad Solutions’ business and operations, Offerpad Solutions’ market, or Offerpad Solutions’ competitors. Securities and industry analysts do not currently, and may never, publish research on SPNV. If no securities or industry analysts commence coverage of Offerpad Solutions, Offerpad Solutions’ stock price and trading volume would likely be negatively impacted. If any of the analysts who may cover Offerpad Solutions change their recommendation regarding the Offerpad Solutions stock adversely, or provide more favorable relative recommendations about Offerpad Solutions’ competitors, the price of the Offerpad Solutions Class A common stock would likely decline. If any analyst who may cover Offerpad Solutions were to cease coverage of Offerpad Solutions or fail to regularly publish reports on Offerpad Solutions, we could lose visibility in the financial markets, which could cause Offerpad Solutions’ stock price or trading volume to decline.

Offerpad Solutions may be unable to obtain additional financing to fund its operations or growth.

Offerpad Solutions may require additional financing to fund its operations or growth. The failure to secure additional financing could have a material adverse effect on the continued development or growth of Offerpad Solutions. None of Offerpad Solutions’ officers, directors or stockholders will be obligated to provide any financing to us after the business combination.

Legal proceedings in connection with the business combination, the outcomes of which are uncertain, could delay or prevent the completion of the business combination.

Lawsuits may be filed against SPNV or its directors and officers in connection with the Transactions. Defending such lawsuits could require SPNV to incur significant costs and draw the attention of SPNV’s management team away from the Transactions. Further, the defense or settlement of any lawsuit or claim that remains unresolved at the time the Transactions are consummated may adversely affect the combined company’s business, financial condition, results of operations and cash flows. Such legal proceedings could delay or prevent the business combination from becoming effective within the agreed upon timeframe.

Changes in laws, regulations or rules, or a failure to comply with any laws, regulations or rules, may adversely affect Offerpad Solutions’ business, investments and results of operations.

Offerpad Solutions will be subject to laws, regulations and rules enacted by national, regional and local governments and the NYSE. In particular, Offerpad Solutions will be required to comply with certain SEC, NYSE and other legal or regulatory requirements. Compliance with, and monitoring of, applicable laws, regulations and rules may be difficult, time consuming and costly. Those laws, regulations or rules and their interpretation and application may also change from time to time and those changes could have a material adverse effect on Offerpad Solutions’ business, investments and results of operations. In addition, a failure to comply with applicable laws, regulations or rules, as interpreted and applied, could have a material adverse effect on Offerpad Solutions’ business and results of operations.

The JOBS Act permits “emerging growth companies” like us to take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies.

We currently qualify as an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act, as modified by the JOBS Act. As such, we take and will continue to take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies for as long as we continue to be an emerging growth company, including: (i) the exemption from the auditor attestation requirements with respect to internal control over financial reporting under Section 404 of the

 

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Sarbanes-Oxley Act; (ii) the exemptions from say-on-pay, say-on-frequency and say-on-golden parachute voting requirements; and (iii) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statement/prospectus. As a result, our stockholders may not have access to certain information they deem important. We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year: (a) following October 23, 2025, the fifth anniversary of the SPNV IPO; (b) in which we have total annual gross revenue of at least $1.07 billion; or (c) in which we are deemed to be a large accelerated filer, which means the market value of Offerpad Solutions common stock that is held by non-affiliates exceeds $700 million as of the last business day of our prior second fiscal quarter, and (ii) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the exemption from complying with new or revised accounting standards provided in Section 7(a)(2)(B) of the Securities Act as long as we are an emerging growth company. An emerging growth company can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. 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. We have elected to avail ourselves 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, we, 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 our financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

We cannot predict if investors will find Offerpad Solutions common stock less attractive because we rely on these exemptions. If some investors find Offerpad Solutions common stock less attractive as a result, there may be a less active trading market for Offerpad Solutions Class A common stock and our stock price may be more volatile.

Immediately following consummation of the Transactions, SPNV will continue to be an “emerging growth company.”

Risks Related to the Redemption

Unless the context otherwise requires, all references in this subsection to the “Company,” “we,” “us” or “our” refer to SPNV prior to the consummation of the business combination.

You must tender your shares of SPNV’s Class A common stock in order to validly seek redemption at the special meeting.

In connection with tendering your shares for redemption, you must elect either to physically tender your common stock certificates to SPNV’s transfer agent or to deliver your shares of SPNV’s common stock to the transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, which election would likely be determined based on the manner in which you hold your shares of SPNV’s common stock, in each case, by two business days prior to the special meeting. The requirement for physical or electronic delivery by two business days prior to the special meeting ensures that a redeeming holder’s election to redeem is irrevocable once the business combination is approved. Any failure to observe these procedures will result in your loss of redemption rights in connection with the vote on the business combination.

SPNV does not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete a business combination with which a substantial majority of SPNV’s stockholders do not agree.

 

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SPNV’s current certificate of incorporation does not provide a specified maximum redemption threshold, except that SPNV will not redeem public shares in an amount that would cause SPNV’s net tangible assets to be less than $5,000,001 (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act). However, the Merger Agreement provides that SPNV’s and Offerpad’s respective obligations to consummate the business combination are conditioned on SPNV having at least $5,000,001 of net tangible assets as of Closing Date and the amount of Available Closing SPNV Cash being least $250,000,000 as of the Closing. As a result, SPNV may be able to complete the business combination even though a substantial portion of public stockholders do not approve the business combination and have redeemed their shares or have entered into privately negotiated agreements to sell their shares to the Sponsor, directors or officers or their affiliates. As of the date of this proxy statement/prospectus, no agreements with respect to the private purchase of public shares by SPNV or the persons described above have been entered into with any such investor or holder. SPNV will file a Current Report on Form 8-K with the SEC to disclose private arrangements entered into or significant private purchases made by any of the aforementioned persons that would affect the vote on the business combination proposal or the other proposals (as described in this proxy statement/prospectus) at the special meeting.

In the event that the aggregate cash consideration that SPNV would be required to pay for all shares of SPNV’s Class A common stock that are validly submitted for redemption, plus any amount required to satisfy the foregoing cash condition pursuant to the terms of the Merger Agreement, exceeds the aggregate amount of cash available to SPNV, SPNV may not complete the business combination or redeem any shares, all shares of SPNV’s Class A common stock submitted for redemption will be returned to the holders thereof and SPNV may instead search for an alternate business combination.

Based on the amount of approximately $402,686,198 in SPNV’s trust account as of June 21, 2021, the record date for the special meeting, and taking into account the anticipated gross proceeds of the PIPE Investment and the SPNV Forward Purchase, 37.15 million shares of SPNV’s Class A common stock may be redeemed and still enable SPNV to have sufficient cash to satisfy the closing condition under the Merger Agreement. We refer to this as the “maximum redemption scenario.”

Public stockholders, together with any affiliates of theirs or any other person with whom they are acting in concert or as a “group,” will be restricted from seeking redemption rights with respect to more than 15% of the public shares.

A public stockholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13(d) of the Exchange Act), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 15% of the shares of SPNV’s Class A common stock included in the units sold in the SPNV IPO unless such stockholder first obtains SPNV’s prior consent. In order to determine whether a stockholder is acting in concert or as a group with another stockholder, SPNV will require each public stockholder seeking to exercise redemption rights to certify to SPNV whether such stockholder is acting in concert or as a group with any other stockholder. Such certifications, together with other public information relating to stock ownership available to SPNV at that time, such as Schedule 13D, Schedule 13G and Section 16 filings under the Exchange Act, will be the sole basis on which SPNV makes the above-referenced determination. Your inability to redeem any such excess shares will reduce your influence over SPNV’s ability to consummate the business combination and you could suffer a material loss on your investment in SPNV if you sell such excess shares in open market transactions. Additionally, you will not receive redemption distributions with respect to such excess shares if SPNV consummates the business combination. As a result, you will continue to hold that number of shares aggregating to more than 15% of the shares sold in the SPNV IPO and, in order to dispose of such excess shares, would be required to sell your stock in open market transactions, potentially at a loss. SPNV cannot assure you that the value of such excess shares will appreciate over time following the business combination or that the market price of shares of Offerpad Solutions Class A common stock will exceed the per-share redemption price. Notwithstanding the foregoing, stockholders may challenge SPNV’s determination as to whether a stockholder is acting in concert or as a group with another stockholder in a court of competent jurisdiction.

 

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However, SPNV’s stockholders’ ability to vote all of their shares (including such excess shares) for or against the business combination is not restricted by this limitation on redemption.

There is no guarantee that a stockholder’s decision whether to redeem its shares for a pro rata portion of the trust account will put the stockholder in a better future economic position.

We can give no assurance as to the price at which a stockholder may be able to sell its public shares in the future following the completion of the business combination or any alternative business combination. Certain events following the consummation of any initial business combination, including the business combination, may cause an increase in our share price, and may result in a lower value realized now than a stockholder of SPNV might realize in the future had the stockholder not redeemed its shares. Similarly, if a stockholder does not redeem its shares, the stockholder will bear the risk of ownership of the public shares after the consummation of any initial business combination, and there can be no assurance that a stockholder can sell its shares in the future for a greater amount than the redemption price set forth in this proxy statement/prospectus. A stockholder should consult the stockholder’s own tax and/or financial advisor for assistance on how this may affect his, her or its individual situation.

Stockholders of SPNV who wish to redeem their shares of SPNV’s Class A common stock for a pro rata portion of the trust account must comply with specific requirements for redemption that may make it more difficult for them to exercise their redemption rights prior to the deadline. If stockholders fail to comply with the redemption requirements specified in this proxy statement/prospectus, they will not be entitled to redeem their shares of SPNV’s Class A common stock for a pro rata portion of the funds held in the trust account.

Stockholders electing to redeem their shares of SPNV’s Class A common stock will receive their pro rata portion of the trust account less franchise and income taxes payable, calculated as of two business days prior to the anticipated consummation of the business combination. Please see the section entitled “Special Meeting of SPNV Stockholders—Redemption Rights” of this proxy statement/prospectus for additional information on how to exercise your redemption rights.

If, despite SPNV’s compliance with the proxy rules, a stockholder fails to receive SPNV proxy materials, such stockholder may not become aware of the opportunity to redeem its shares of SPNV’s Class A common stock. In addition, the proxy materials that SPNV is furnishing to public stockholders of SPNV’s Class A common stock in connection with the business combination describes the various procedures that must be complied with in order to validly redeem public shares of SPNV’s Class A common stock. In the event that a stockholder fails to comply with these procedures, its shares of SPNV’s Class A common stock may not be redeemed.

 

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SPECIAL MEETING OF SPNV STOCKHOLDERS

General

SPNV is furnishing this proxy statement/prospectus to SPNV’s stockholders as part of the solicitation of proxies by the SPNV Board for use at the special meeting of SPNV stockholders to be held on                  , 2021, and at any adjournment or postponement thereof. This proxy statement/prospectus provides SPNV’s stockholders with information they need to know to be able to vote or instruct their vote to be cast at the special meeting.

Date, Time and Place

The special meeting of stockholders will be held via live webcast at                  Eastern Time, on                 , 2021. The special meeting can be accessed by visiting                 , where you will be able to listen to the meeting live and vote during the meeting. Please note that you will only be able to access the special meeting by means of remote communication. Please have your Control Number, which can be found on your proxy card, to join the special meeting. If you do not have a control number, please contact the Continental Stock Transfer & Trust Company, the Transfer Agent.

Purpose of the SPNV Special Meeting

At the special meeting, SPNV is asking holders of SPNV’s common stock to consider and vote upon:

 

   

a proposal to approve the business combination described in this proxy statement/prospectus, including (a) adopting the Merger Agreement and (b) approving the other transactions contemplated by the Merger Agreement and related agreements described in this proxy statement/prospectus. Please see the section entitled “Proposal No. 1—The Business Combination Proposal”;

 

   

a proposal to approve and adopt the Proposed Charter. Please see the section entitled “Proposal No. 2—The Charter Proposal”;

 

   

a proposal to vote upon, on a non-binding advisory basis, a separate proposal with respect to certain governance provisions in the Proposed Charter presented separately in accordance with SEC requirements. Please see the section entitled “Proposal No. 3—The Governance Proposal”;

 

   

a proposal to approve the 2021 Plan. Please see the section entitled “Proposal No. 4—The Incentive Plan Proposal”;

 

   

a proposal to approve the ESPP. Please see the section entitled “Proposal No. 5—The ESPP Proposal”;

 

   

a proposal to approve, for purposes of complying with the applicable provisions of NYSE Listing Rule 312, the issuance of more than 20% of SPNV’s issued and outstanding shares of common stock and the issuance of shares of Class A common stock and warrants to related parties of SPNV, in each case in connection with the business combination. Please see the section entitled “Proposal No. 6—The NYSE Proposal”; and

 

   

a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the business combination proposal, the charter proposal, the governance proposal, the incentive plan proposal, the ESPP proposal, or the NYSE proposal. Please see the section entitled “Proposal No. 7The Adjournment Proposal.

Recommendation of the SPNV Board

The SPNV Board unanimously recommends that stockholders vote “FOR” the business combination proposal, “FOR” the charter proposal, “FOR” the governance proposal, “FOR” the incentive plan proposal, “FOR” the ESPP proposal, “FOR” the NYSE proposal and “FOR” the adjournment proposal.

 

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When you consider the SPNV Board’s recommendation of these proposals, you should keep in mind that our directors and officers have interests in the business combination that are different from, or in addition to, the interests of SPNV stockholders generally. Please see the section entitled “Proposal No. 1—The Business Combination Proposal - Interests of Certain Persons in the Business Combination” for additional information. The SPNV Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Transactions and in recommending to the SPNV stockholders that they vote “FOR” the proposals presented at the special meeting.

Record Date; Persons Entitled to Vote

SPNV has fixed the close of business on June 21, 2021, as the record date for determining SPNV stockholders entitled to notice of and to attend and vote at the special meeting. As of the close of business on the record date, there were 50,312,500 shares of SPNV’s common stock outstanding and entitled to vote. Each share of SPNV’s common stock is entitled to one vote per share at the special meeting.

Quorum

The presence at the special meeting by attendance via the virtual meeting website or by proxy, of a majority of the voting power of all the outstanding shares of SPNV’s common stock as of the record date entitled to vote constitutes a quorum at the special meeting. Proxies that are marked “abstain” will be treated as shares present for purposes of determining the presence of a quorum on all matters. Broker non-votes will not be counted for the purposes of determining the existence of a quorum or for purposes of determining the number of votes cast at the special meeting.

Vote Required

The approval of each of the business combination proposal, the governance proposal (which is a non-binding advisory vote), the incentive plan proposal, the ESPP proposal, the NYSE proposal and the adjournment proposal require the affirmative vote of the holders of a majority of the shares of SPNV’s common stock that are present and entitled to vote at the special meeting. Accordingly, if a valid quorum is established, a SPNV stockholder’s failure to vote by proxy or to vote at the special meeting with regard to the business combination proposal, the governance proposal, the incentive plan proposal, the ESPP proposal, the NYSE proposal and the adjournment proposal will have no effect on such proposals.

The approval of the charter proposal requires the affirmative vote of the holders of a majority of the outstanding shares of SPNV’s common stock entitled to vote thereon at the special meeting, which majority shall include the affirmative vote or written consent of the holders of a majority of the shares of SPNV’s Class B common stock then outstanding, voting separately as a class. Accordingly, if a valid quorum is established, a SPNV stockholder’s failure to vote by proxy or to vote at the special meeting with regard to the charter proposal will have the same effect as a vote “against” such proposal.

Consummation of the Transactions is conditioned on the approval of each of the Condition Precedent Proposals. It is important for you to note that in the event that the Condition Precedent Proposals do not receive the requisite vote for approval, we will not consummate the business combination.

Effect of Abstentions and Broker Non-Votes

Abstentions will have no effect on the outcome of each of the business combination proposal, the governance proposal, the incentive plan proposal, the ESPP proposal, the NYSE proposal and the adjournment proposal. However, abstentions will count as a vote “against” the charter proposal.

Under the rules of various national and regional securities exchanges, your broker, bank or nominee cannot vote your shares with respect to non-routine matters unless you provide instructions on how to vote in accordance

 

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with the information and procedures provided to you by your broker, bank or nominee. We believe the proposals presented to the stockholders at the special meeting will be considered non-routine and, therefore, your broker, bank or nominee cannot vote your shares without your instruction on any of the proposals presented at the special meeting. If you do not provide instructions with your proxy, your broker, bank, or other nominee may deliver a proxy card expressly indicating that it is NOT voting your shares; this indication that a broker, bank or nominee is not voting your shares is referred to as a “broker non-vote.”

Broker non-votes will not be counted for the purposes of determining the existence of a quorum or for purposes of determining the number of votes cast at the special meeting. Your bank, broker or other nominee can vote your shares only if you provide instructions on how to vote. You should instruct your broker to vote your shares in accordance with directions you provide.

Broker non-votes will count as a vote “AGAINST” the charter proposal but will not have any effect on the outcome of any other proposals.

Voting Your Shares

Each share of SPNV’s common stock that you own in your name entitles you to one vote. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted.

There are two ways to vote your shares of SPNV’s common stock at the special meeting:

 

   

You Can Vote By Signing and Returning the Enclosed Proxy Card. If you vote by proxy card, your “proxy,” whose name is listed on the proxy card, will vote your shares as you instruct on the proxy card. If you sign and return the proxy card but do not give instructions on how to vote your shares, your shares will be voted “FOR” the business combination proposal, “FOR” the charter proposal, “FOR” the governance proposal, “FOR” the incentive plan proposal, “FOR” the ESPP proposal, “FOR” the NYSE proposal and “FOR” the adjournment proposal, if presented. Votes received after a matter has been voted upon at the special meeting will not be counted.

 

   

You can attend the special meeting via the virtual meeting platform and vote during the meeting by following the instructions on your proxy card. You can access the special meeting by visiting the website                 . You will need your control number for access. If you do not have a control number, please contact                 . Instructions on how to attend and participate at the special meeting are available at .

However, if your shares are held in the name of your broker, bank or another nominee, you must get a proxy from the broker, bank or other nominee. That is the only way SPNV can be sure that the broker, bank or nominee has not already voted your shares.

Revoking Your Proxy

If you are a stockholder and you give a proxy, you may revoke it at any time before it is exercised by doing any one of the following:

 

   

you may send another proxy card with a later date;

 

   

you may notify SPNV’s Secretary in writing before the special meeting that you have revoked your proxy; or

 

   

you may attend the special meeting, revoke your proxy, and vote at the special meeting, as indicated above.

Who Can Answer Your Questions About Voting Your Shares

If you are a stockholder and have any questions about how to vote or direct a vote in respect of your shares of SPNV’s common stock, you may call Morrow Sodali LLC, SPNV’s proxy solicitor, at (203) 658-9400 (Call Collect) or (800) 662-5200 (Toll Free) or SPNV at SPNV.info@investor.morrowsodali.com.

 

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Redemption Rights

Pursuant to our current certificate of incorporation, public stockholders may seek to redeem their shares for cash if the business combination is consummated, regardless of whether they vote and, if they do vote, irrespective of whether they vote “for” or “against” the business combination proposal. Any stockholder holding public shares as of the record date may demand that SPNV redeem such shares for a full pro rata portion of the trust account (which, for illustrative purposes, was approximately $10.00 per share as of June 21, 2021, the record date for the special meeting), calculated as of two business days prior to the anticipated consummation of the business combination. If a holder properly seeks redemption as described in this section and the business combination is consummated, SPNV will redeem these shares for a pro rata portion of funds deposited in the trust account and the holder will no longer own these shares following the business combination.

Notwithstanding the foregoing, a public stockholder, together with any affiliate such holder or any other person with whom such holder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from seeking redemption rights with respect to more than 15% of the public shares. Accordingly, all public shares in excess of 15% held by a public stockholder, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group,” will not be redeemed for cash.

The Sponsor and the SPNV Insiders will not have redemption rights with respect to any shares of SPNV’s common stock owned by them in connection with the Transactions.

SPNV public stockholders may demand that SPNV redeem their public shares for cash if the business combination is consummated. Public stockholders will be entitled to receive cash for these shares without voting and, if they do vote, irrespective of whether they vote for or against the business combination. Public stockholders may demand redemption by delivering their stock, either physically or electronically using Depository Trust Company’s DWAC System, to SPNV’s transfer agent prior to the vote at the special meeting. If you hold the shares in street name, you will have to coordinate with your broker to have your shares certificated or delivered electronically. Certificates that have not been tendered (either physically or electronically) in accordance with these procedures will not be redeemed for cash. There is a nominal cost associated with this tendering process and the act of certificating the shares or delivering them through the DWAC system. The transfer agent will typically charge the tendering broker $100 and it would be up to the broker whether or not to pass this cost on to the redeeming stockholder. In the event the proposed business combination is not consummated this may result in an additional cost to stockholders for the return of their shares.

Any request to redeem such shares, once made, may be withdrawn at any time up to the vote on the business combination proposal. Furthermore, if a public stockholder delivered its certificate in connection with an election of its redemption and subsequently decides prior to the applicable date not to elect to exercise such rights, it may simply request that the transfer agent return the certificate (physically or electronically).

If the business combination is not approved or completed for any reason, then SPNV’s public stockholders who elected to exercise their redemption rights will not be entitled to redeem their shares for a full pro rata portion of the trust account, as applicable. In such case, SPNV will promptly return any shares delivered by public stockholders. Additionally, if SPNV would be left with less than $5,000,001 of net tangible assets as a result of the public stockholders properly demanding redemption of their shares for cash, SPNV will not be able to consummate the business combination.

The closing price of SPNV’s Class A common stock on June 21, 2021, the record date for the special meeting, was $9.93 per share. The cash held in the trust account on such date was approximately $402,686,198 (approximately $10.00 per public share). Prior to exercising redemption rights, stockholders should verify the market price of SPNV’s common stock as they may receive higher proceeds from the sale of their SPNV’s common stock in the public market than from exercising their redemption rights if the market price per share is

 

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higher than the redemption price. SPNV cannot assure its stockholders that they will be able to sell their shares of SPNV’s common stock in the open market, even if the market price per share is higher than the redemption price stated above, as there may not be sufficient liquidity in its securities when its stockholders wish to sell their shares.

If a public stockholder exercises its redemption rights, then it will be exchanging its shares of SPNV’s common stock for cash and will no longer own those shares. You will be entitled to receive cash for these shares only if you properly demand redemption no later than the second business day preceding the vote on the business combination proposal by delivering your stock certificate (either physically or electronically) to SPNV’s transfer agent prior to the vote at the special meeting, and the business combination is consummated.

Appraisal Rights

Neither stockholders, unitholders nor warrant holders of SPNV have appraisal rights in connection the business combination under the DGCL.

Proxy Solicitation Costs

SPNV is soliciting proxies on behalf of the SPNV Board. This solicitation is being made by mail. SPNV and its directors, officers and employees may also solicit proxies in person, by telephone or by other electronic means. SPNV will bear the cost of the solicitation.

SPNV has hired Morrow Sodali LLC to assist in the proxy solicitation process. SPNV will pay that firm a fee of $                 plus disbursements. Such payment will be made from non-trust account funds.

SPNV will ask banks, brokers and other institutions, nominees and fiduciaries to forward the proxy materials to their principals and to obtain their authority to execute proxies and voting instructions. SPNV will reimburse them for their reasonable expenses.

 

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PROPOSAL NO. 1—THE BUSINESS COMBINATION PROPOSAL

SPNV’s stockholders are being asked to approve the business combination described in this proxy statement/prospectus, including (a) adopting the Merger Agreement and (b) approving the other Transactions and related agreements described in this proxy statement/prospectus. The discussion in this proxy statement/prospectus of the business combination and the principal terms of the Merger Agreement is subject to, and is qualified in its entirety by reference to, the Merger Agreement, which is attached as Annex A to this proxy statement/prospectus.

You should read carefully this proxy statement/prospectus in its entirety for more detailed information concerning the Merger Agreement. Please see the subsection entitled “—Certain Agreements Related to the Business Combination—Merger Agreement” below, for additional information and a summary of certain terms of the Merger Agreement.

We may consummate the business combination only if it is approved by the affirmative vote of the holders of a majority of the votes cast by holders of our outstanding shares of SPNV’s common stock represented at the special meeting by attendance via the virtual meeting website or by proxy and entitled to vote at the special meeting.

General

Structure of the Transactions

Pursuant to the Merger Agreement, a business combination between SPNV and Offerpad will be effected through the First Merger, whereby First Merger Sub will merge with and into Offerpad with Offerpad surviving such merger as a wholly owned subsidiary of SPNV, followed by the Second Merger, whereby, immediately following and as part of the same overall transaction as the First Merger, Offerpad will merge with and into Second Merger Sub, with Second Merger Sub surviving such merger as a wholly owned subsidiary of SPNV.    

The business combination will be effected as described in the following diagram:

 

LOGO

 

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The following diagram illustrates the ownership structure of Offerpad Solutions, immediately following the business combination (percentages shown as ownership on a fully diluted, net exercise basis) and (a) excludes the impact of the shares of SPNV’s Class A common stock underlying the warrants, (b) assumes that no public stockholder exercises redemption rights with respect to its shares for a pro rata portion of the funds in SPNV’s trust account and (c) excludes the shares reserved for issuance under the Offerpad Solutions Inc. 2021 Incentive Award Plan and the Offerpad Solutions Inc. 2021 Employee Stock Purchase Plan:

 

LOGO

 

(1)

Excludes Brian Bair.

 

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The following diagram illustrates the ownership structure of Offerpad Solutions, immediately following the business combination (percentages shown as ownership on a fully diluted, net exercise basis) and (a) excludes the impact of the shares of SPNV’s Class A common stock underlying the warrants, (b) assumes the maximum number of public stockholders exercise redemption rights with respect to such holders’ shares for a pro rata portion of the funds in SPNV’s trust account and (c) excludes the shares reserved for issuance under the Offerpad Solutions Inc. 2021 Incentive Award Plan and the Offerpad Solutions Inc. 2021 Employee Stock Purchase Plan:

 

LOGO

 

(1)

Excludes Brian Bair.

Impact of the Business Combination on SPNV’s Public Float

It is anticipated that, upon the Closing: (i) existing stockholders of Offerpad will own approximately 74.9% of Offerpad Solutions on a fully diluted net exercise basis; (ii) SPNV’s public stockholders (other than the PIPE Investors) will retain an ownership interest of approximately 13.4% in Offerpad Solutions on a fully diluted net exercise basis; (iii) the PIPE Investors will own approximately 6.7% of Offerpad Solutions on a fully diluted net exercise basis; and (iv) the Sponsor (and its affiliates, including the purchasers pursuant to the SPNV Forward Purchase) will own approximately 5.0% of Offerpad Solutions on a fully diluted net exercise basis. These indicative levels of ownership interest: (i) exclude the impact of the shares of SPNV’s Class A common stock underlying warrants and (ii) assume that no public stockholder exercises redemption rights with respect to its shares for a pro rata portion of the funds in the trust account.

For more information, please see the sections entitled “Unaudited Pro Forma Condensed Combined Financial Information,” “Proposal No. 4—The Incentive Plan Proposal” and “Proposal No. 5—The ESPP Proposal.”

 

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The following table illustrates varying ownership levels in Offerpad Solutions at the Closing, assuming no redemptions by SPNV’s public stockholders and the Maximum Redemptions by SPNV’s public stockholders (i.e., the maximum redemptions that would still result in satisfaction of the Available Closing SPNV Cash condition in the Merger Agreement as described elsewhere in this proxy statement/prospectus):

 

     Assuming No Redemptions     Assuming Maximum Redemptions  

Stockholder

   Shares      Percentage     Shares      Percentage  

Former OfferPad equityholders(1)(2)

     225,000,000        74.9     225,000,000        85.5

Sponsor and related parties(3)

     15,062,500        5.0     15,062,500        5.7

Former Supernova Class A stockholders(4)

     40,250,000        13.4     3,100,000        1.2

PIPE Investors

     20,000,000        6.7     20,000,000        7.6

Total shares of Offerpad Solutions common stock outstanding at closing of the transaction(1)(2)(5)

     300,312,500        100     263,162,500        100

 

(1)

Amount includes 14,815,804 shares of Class B common stock of Offerpad Solutions to be issued to Brian Bair or entities controlled by Mr. Bair, which will entitle the holders to 10 votes per share until the earlier of (a) the date that is nine months following the date on which Mr. Bair (x) is no longer providing services, whether upon death, resignation, removal or otherwise, to Offerpad Solutions as a member of the senior leadership team, officer or director and (y) has not provided any such services for the duration of such nine-month period; and (b) the date as of which the Mr. Bair or his permitted transferees have transferred, in the aggregate, more than seventy-five (75%) of the shares of Class B common stock that were held by Mr. Bair and his permitted transferees immediately following the Closing.

(2)

Amount presents shares on a fully diluted, net exercise basis. The actual number of outstanding shares of Offerpad Solutions common stock held by former Offerpad equity holders at Closing will vary depending on the number of Offerpad options that remain unexercised prior to Closing. Based on shares of Offerpad capital stock outstanding as of June 16, 2021, an estimated 199,992,460 shares of Offerpad Solutions common stock would be issued to Offerpad equityholders at Closing.

(3)

Amount includes 10,062,500 shares of Class A common stock of Offerpad Solutions to be issued upon conversion of outstanding Class B common stock of SPNV, of which 8,058,050 shares will be vested as of the Closing and 2,004,450 shares will be unvested as of the Closing, and 5,000,000 shares of Class A common stock of Offerpad Solutions to be purchased by affiliates of Mr. Klabin and Mr. Rascoff pursuant to the SPNV Forward Purchase Agreements.

(4)

The underwriters for the SPNV IPO, Jefferies and J.P. Morgan, will collectively receive approximately $14.1 million of deferred underwriting commissions in connection with the consummation of SPNV’s initial business combination, irrespective of the amount of redemptions by SPNV’s public stockholders. Assuming no redemptions, the underwriters will receive deferred commissions of $0.35 per public share that remains outstanding after the Transactions. Assuming Maximum Redemptions, the underwriters will receive deferred commissions of approximately $4.54 per public share that remains outstanding after the Transactions.

(5)

Stockholders will experience additional dilution to the extent Offerpad Solutions issues additional shares after the Closing. The tables above do not include (i) up to 13,416,667 shares of Offerpad Solutions Class A common stock that will be issuable upon exercise of the public warrants at an exercise price of $11.50 per share, (ii) up to 8,366,667 shares of Offerpad Solutions Class A common stock that will be issuable upon exercise of the private placement warrants and warrants to be purchased as part of the SPNV Forward Purchase at an exercise price of $11.50 per share, (iii) shares of Offerpad Solutions Class A common stock that will be available for issuance under the 2021 Plan, which will initially be equal to 10% of the fully-diluted shares as of the Closing or (iv) shares of Offerpad Solutions Class A common stock that will be available for issuance under the ESPP, which will initially be equal to 1% of the fully-diluted shares as of the Closing. The following table illustrates the impact on relative ownership levels assuming the issuance of all such shares.

 

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     Assuming No Redemptions     Assuming Maximum Redemptions  
     Shares      Percentage     Shares      Percentage  

Total shares of Offerpad Solutions common stock outstanding at closing of the transaction

     300,312,500        84.0     263,162,500        83.2

Shares underlying public warrants

     13,416,667        3.8     13,416,667        4.2

Shares underlying private placement and SPNV Forward purchase warrants

     8,366,667        2.3     8,366,667        2.7

Shares initially reserved for issuance under 2021 Plan(a)

     32,197,762        9.0     28,482,762        9.0

Shares initially reserved for issuance under
ESPP(a)

     3,219,776        0.9     2,848,276        0.9

Total

     357,513,372        100.0     316,276,872        100.0

 

(a)

The number of shares of Offerpad Solutions Class A common stock available for issuance under the 2021 Plan and the ESPP will be annually increased on January 1 of each calendar year beginning in 2022 and ending in 2031 by amounts described in the sections entitled “Proposal No. 4—The Incentive Plan Proposal” and “Proposal No. 5—The ESPP Proposal” elsewhere in this proxy statement/prospectus.

Additionally, subject to the rules of the NYSE, the board of directors of Offerpad Solutions will retain broad authority after the Transactions to issue additional capital stock without obtaining stockholder approval.

Certain Agreements Related to the Business Combination

Merger Agreement

The summary of the material provisions of the Merger Agreement set forth below and elsewhere in this proxy statement/prospectus is qualified in its entirety by reference to the Merger Agreement, a copy of which is attached to this proxy statement/prospectus as Annex A and which is incorporated by reference in this proxy statement/prospectus. All stockholders are encouraged to read the Merger Agreement in its entirety for a more complete description of the terms and conditions of the business combination.

Closing Share Consideration

In connection with the Transactions, the value of the aggregate equity consideration to be paid to holders of Offerpad stock and holders of Offerpad Options will be equal to the Equity Value. As a result of and upon the Closing, among other things, and as more fully described elsewhere in this proxy statement/prospectus, (a) each share of Offerpad stock that is issued and outstanding immediately prior to the First Effective Time (other than Excluded Shares and any shares held by the Founder) will be cancelled and converted into the right to receive a number of shares of Offerpad Solutions Class A common stock and (b) each share of Offerpad stock that is issued and outstanding immediately prior to the First Effective Time and held by the Founder will be cancelled and converted into the right to receive a number of shares of Offerpad Solutions Class B common stock, in each case, equal to the Exchange Ratio.

Treatment of Offerpad Options

As a result of and upon the Closing, among other things, each Offerpad Option, whether vested or unvested, will be assumed and converted into an Offerpad Solutions Option, which will be subject to the same terms and conditions that applied to the Offerpad Option as of immediately prior to the Closing. The portion of the Closing Share Consideration reserved for the conversion of the Offerpad Options is counted using the treasury stock method.

 

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Subject to the terms of the Merger Agreement, each Offerpad Solutions Option will relate to the number of whole shares of Offerpad Solutions Class A common stock (rounded down to the nearest whole share) equal to (i) the number of shares of Offerpad common stock subject to the applicable Offerpad Option multiplied by (ii) the Exchange Ratio. The exercise price for each Offerpad Solutions Option will equal (i) the exercise price of the applicable Offerpad Option divided by (ii) the Exchange Ratio (rounded up to the nearest whole cent).

Representations and Warranties

The Merger Agreement contains representations and warranties of the SPNV Parties and Offerpad, certain of which are qualified by materiality and material adverse effect (as defined below) and may be further modified and limited by the confidential disclosure letters delivered by the parties concurrently with the execution of the Merger Agreement. See “—Material Adverse Effect” below. The representations and warranties of SPNV are also qualified by information included in SPNV’s public filings, filed or submitted to the SEC on or prior to the date of the Merger Agreement (subject to certain exceptions contemplated by the Merger Agreement).

Representations and Warranties of Offerpad

Offerpad has made representations and warranties relating to, among other things, corporate organization, subsidiaries, due authorization, no conflict, governmental authorities and consents, current capitalization of Offerpad and its subsidiaries, financial statements, undisclosed liabilities, litigation and proceedings, compliance with laws, contracts and no defaults, Offerpad benefit plans, labor matters, taxes, insurance, permits, personal property and assets, real property, intellectual property and IT security, environmental matters, absence of changes, brokers’ fees, business relationships, related party transactions, information supplied, regulatory compliance and no interested stockholders.

Representations and Warranties of SPNV Parties

The SPNV Parties have made representations and warranties relating to, among other things, corporate organization, due authorization, no conflict, litigation and proceedings, governmental authorities and consents, financial ability and trust account, brokers’ fees, SEC reports, financial statements and Sarbanes-Oxley Act, undisclosed liabilities, business activities, tax matters, capitalization, NYSE listing, PIPE Investment and SPNV Forward Purchase, related party transactions, Investment Company Act and information supplied.

Material Adverse Effect

Under the Merger Agreement, certain representations and warranties of the parties are qualified in whole or in part by a material adverse effect standard for purposes of determining whether a breach of such representations and warranties has occurred.

With respect to Offerpad and its subsidiaries, a material adverse effect under the Merger Agreement means any effect, occurrence, development, fact, condition or change (each an “Effect”) that, individually or in the aggregate with other Effects, (a) has had, or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on the business, properties, assets, liabilities, results of operations or condition (financial or otherwise) of Offerpad and its subsidiaries, taken as a whole, or (b) would, or would reasonably be expected to, prevent, materially delay or materially impair Offerpad from consummating the Mergers; provided, however, that solely for purposes of clause (a) above, in no event will any of the following, alone or in combination, be deemed to constitute, or be taken into account in determining whether there has been or will be, a “Material Adverse Effect”:

 

  a.

any change in applicable laws or GAAP or any official interpretation thereof;

 

  b.

any change in interest rates or economic, political, business, financial, commodity, currency or market conditions generally;

 

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  c.

the announcement or the execution of the Merger Agreement, the pendency or consummation of the Mergers or the performance of the Merger Agreement, including the impact thereof on relationships, contractual or otherwise, with customers, suppliers, landlords, licensors, distributors, partners, providers and employees (provided, that this clause (c) will not apply to any representation or warranty to the extent such representation or warranty addresses the consequences resulting from the execution and delivery of the Merger Agreement, the performance of obligations of a party to the Merger Agreement or the consummation of the Transactions);

 

  d.

any Effect generally affecting other participants in any of the industries in which Offerpad or its subsidiaries operate;

 

  e.

Offerpad’s compliance with the terms of the Merger Agreement or Offerpad’s taking of any action required or contemplated by the Merger Agreement or with the prior written consent of SPNV or at the written request of SPNV, First Merger Sub or Second Merger Sub;

 

  f.

any earthquake, hurricane, epidemic, pandemic (including COVID-19), tsunami, tornado, flood, mudslide, wild fire or other natural disaster, act of God or other force majeure event;

 

  g.

any national or international political or social conditions in countries in which, or in the proximate geographic region of which, Offerpad operates, including the engagement by the United States or such other countries in hostilities or the escalation thereof, whether or not pursuant to the declaration of a national emergency or war, or the occurrence or the escalation of any military or terrorist attack upon the United States or such other country, or any territories, possessions, or diplomatic or consular offices of the United States or such other countries or upon any United States or such other country military installation, equipment or personnel; or

 

  h.

COVID-19 or any COVID-19 Measures, or Offerpad’s or any of its subsidiaries’ compliance therewith.

Any Effect referred to in clauses (a), (b), (d), (f), (g) and (i) above will be taken into account in determining if a Material Adverse Effect has occurred to the extent (but only to the extent) that such Effects have had or are reasonably likely to have a disproportionate and adverse impact on Offerpad and its subsidiaries, taken as a whole, as compared to other similarly situated competitors or comparable entities operating in the industries or markets in which Offerpad and its subsidiaries operate.

With respect to the SPNV Parties, a material adverse effect under the Merger Agreement means any means any effect, occurrence, development, fact, condition or change (each an “Effect”) that, individually or in the aggregate with other Effects, (a) has had, or would reasonably be expected to have, a material adverse effect on the business, properties, assets, liabilities, results of operations or condition (financial or otherwise) of the SPNV Parties, taken as a whole, or (b) would, or would reasonably be expected to, prevent, materially delay or materially impair SPNV, First Merger Sub or Second Merger Sub from consummating the Mergers; provided, however, that solely for purposes of clause (a) above, in no event will any of the following, alone or in combination, be deemed to constitute, or be taken into account in determining whether there has been or will be, a “Material Adverse Effect”:

 

  a.

any change in applicable laws or GAAP or any official interpretation thereof;

 

  b.

any change in interest rates or economic, political, business, financial, commodity, currency or market conditions generally;

 

  c.

the announcement or the execution of the Merger Agreement, the pendency or consummation of the Mergers or the performance of the Merger Agreement, including the impact thereof on relationships, contractual or otherwise, with customers, suppliers, landlords, licensors, distributors, partners, providers and employees (provided, that this clause (c) shall not apply to any representation or warranty to the extent such representation or warranty addresses the consequences resulting from the execution and delivery of the Merger Agreement, the performance of obligations of a party to the Merger or the consummation of the Transactions;

 

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  d.

any Effect generally affecting other blank check companies;

 

  e.

SPNV’s, First Merger Sub’s or Second Merger Sub’s compliance with the terms of the Merger Agreement or SPNV’s, First Merger Sub’s or Second Merger Sub’s taking of any action required or contemplated by the Merger Agreement or with the prior written consent of Offerpad or at the written request of Offerpad;

 

  f.

any earthquake, hurricane, epidemic, pandemic (including COVID-19), tsunami, tornado, flood, mudslide, wild fire or other natural disaster, act of God or other force majeure event;

 

  g.

any national or international political or social conditions in countries in which, or in the proximate geographic region of which, SPNV operates, including the engagement by the United States or such other countries in hostilities or the escalation thereof, whether or not pursuant to the declaration of a national emergency or war, or the occurrence or the escalation of any military or terrorist attack upon the United States or such other country, or any territories, possessions, or diplomatic or consular offices of the United States or such other countries or upon any United States or such other country military installation, equipment or personnel; or

 

  h.

COVID-19 or any COVID-19 Measures, or SPNV’s compliance therewith.

Any Effect referred to in clauses (a), (b), (d), (f), (g) and (h) above will be taken into account in determining if a Material Adverse Effect has occurred to the extent (but only to the extent) that such Effects have had or are reasonably likely to have a disproportionate and adverse impact on SPNV as compared to other blank check companies.

Covenants and Agreements

Offerpad has made covenants relating to, among other things, conduct of business, inspection, the HSR Act and approvals, no claim against the trust account, FIRPTA, Offerpad Stockholder Approval, affiliate agreements, preparation and delivery of PCAOB audited financial statements, credit agreements and payoff letters and the Pre-Closing Restructuring.

SPNV has made covenants relating to, among other things, the HSR Act and regulatory approvals, indemnification and insurance, SPNV’s conduct of business, the PIPE Investment and the SPNV Forward Purchase Agreement, inspection, SPNV’s NYSE listing, SPNV’s public filings, Section 16 matters, post-Closing directors, committees and officers, the 2021 Plan and ESPP and qualification as an emerging growth company.

Pre-Closing Restructuring

Pursuant to the Merger Agreement, prior to the First Effective Time, Offerpad will, among other things, (a) amend and restate its certificate of incorporation to include the First Merger as a Deemed Liquidation Event (as defined therein) and (b) take any and all actions necessary to cause certain warrants of Offerpad common stock to be exercised in full on a cashless basis (together with clause (a), the “Pre-Closing Restructuring”).

Conduct of Business by Offerpad

Offerpad has agreed that from the date of the Merger Agreement until the earlier of the Closing or the termination of the Merger Agreement (the “Interim Period”), it will, and will cause its subsidiaries to, except as required by the Merger Agreement, as required by applicable law, as set forth on Offerpad’s disclosure letter, as consented to in writing by SPNV (which consent will not be unreasonably conditioned, withheld, delayed or denied), or for actions that are reasonably required to comply with COVID-19 Measures, operate its buesiness only in the ordinary course.

 

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During the Interim Period, Offerpad has also agreed not to, and to cause its subsidiaries not to, except as required by the Merger Agreement, as required by applicable law, as set forth on Offerpad’s disclosure letter or as consented to in writing by SPNV (which consent will not be unreasonably conditioned, withheld, delayed or denied):

 

   

change, waive or amend the governing documents of Offerpad;

 

   

make, declare, set aside, establish a record date for or pay any dividend or distribution, other than any dividends or distributions from any wholly owned subsidiary of Offerpad to Offerpad or any other wholly owned subsidiaries of Offerpad;

 

   

issue, deliver, sell, transfer, pledge, dispose of or place any lien (other than a permitted lien) on, or enter into any contract with respect to the voting of, any shares of capital stock or any other equity or voting securities of Offerpad or any of its subsidiaries;

 

   

issue, grant or agree to provide any options, warrants or other rights to purchase or obtain any shares of capital stock or any other equity or equity-based or voting securities of Offerpad, except, in each case, for the issuance of shares of capital stock of Offerpad in connection with Offerpad Options that are outstanding as of the date of the Merger Agreement;

 

   

sell, assign, transfer, convey, lease, exclusively license, abandon, allow to lapse of expire, subject to or grant any lien (other than permitted liens) on or otherwise dispose of any material assets, or properties of Offerpad and its subsidiaries, taken as a whole, other than (i) the sale or lease of owned residential properties to customers in the ordinary course of business, (ii) the sale of goods and services to customers, or the sale or other disposition of assets or equipment deemed by Offerpad in its good faith reasonable business judgment to be obsolete or no longer material to the business of Offerpad and its subsidiaries, taken as a whole, in each such case, in the ordinary course of business and (iii) transactions between Offerpad and any wholly owned subsidiary of Offerpad or between wholly owned subsidiaries of Offerpad;

 

   

settle any pending or threatened Action (i) if such settlement would require payment by Offerpad and/or its subsidiaries in an amount greater than $1,000,000 or (ii) to the extent such settlement is adverse to Offerpad and/or its subsidiaries and involves an Action brought by a governmental authority or alleged criminal wrongdoing;

 

   

except as required by applicable law or the terms of any existing Offerpad benefit plans as in effect on the date of the Merger Agreement and set forth on Offerpad’s disclosure letter, (i) materially increase the compensation or benefits of any employee of Offerpad or any of its subsidiaries except for increases in salary or hourly wage rates made in the ordinary course of business to such employees with annual base salary less than $300,000 or for ordinary course annual salary increases (and corresponding bonus opportunity increases) for 2021 for all employees that do not exceed, in the aggregate, 4% of the aggregate salary paid by Offerpad and its subsidiaries in calendar year 2020, (ii) make any grant or promise of any severance, retention, incentive, bonus or termination payment to any person, except (A) severance or termination payments in connection with the termination of any employee with a base salary of less than $300,000 in the ordinary course of business or (B) bonus payments that do not exceed $100,000 for any individual, (iii) make any change in the key management structure of Offerpad or any of its subsidiaries, including the hiring of additional officers or the termination (other than for “cause” or due to death or disability) of existing officers, (iv) hire any employee of Offerpad or its subsidiaries or any other individual who is providing or will provide services to Offerpad or its subsidiaries other than any employee with an annual base salary of less than $300,000 in the ordinary course of business that would not otherwise violate subsection (iii) or (v) except in the ordinary course of business and as would not otherwise violate subsections (i)-(iv), establish, adopt, enter into, amend in any material respect or terminate any Offerpad benefit plan or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Offerpad benefit plan if it were in existence as of the date of the Merger Agreement;

 

   

split, combine, subdivide, reclassify, redeem, purchase or otherwise acquire any shares of capital stock (or other equity interests) of Offerpad or any of its subsidiaries or any securities or obligations convertible

 

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(whether currently convertible or convertible only after the passage of time or the occurrence of certain events) into or exchangeable for any shares of capital stock (or other equity interests) of Offerpad or any of its subsidiaries, except for (i) acquisitions of shares of capital stock of Offerpad in connection with the “net-settlement” exercise of Offerpad Options, (ii) the acquisition by Offerpad or any of its subsidiaries of any shares of restricted stock (other than pursuant to subsection (i)) of Offerpad or its subsidiaries in connection with the forfeiture or cancellation thereof, and (iii) transactions between Offerpad and any wholly owned subsidiary of Offerpad or between wholly owned subsidiaries of Offerpad;

 

   

make any change in its accounting principles or methods of accounting materially affecting the reported consolidated assets, liabilities or results of operations of Offerpad and its subsidiaries, other than as may be required by applicable law or GAAP;

 

   

adopt or enter into a plan of, or otherwise effect, a complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;

 

   

except in the ordinary course of business consistent with past practice, make, change or revoke any material tax election, adopt or change (or request any governmental authority to change) any material accounting method or accounting period with respect to taxes, file any amended material tax return, settle or compromise any material tax liability or claim for a refund of a material amount of taxes, enter into any closing agreement or other binding written agreement with respect to any material tax, or enter into any tax sharing or tax indemnification agreement or similar agreement (excluding commercial contracts not primarily relating to taxes), in each case, to the extent such action could reasonably be expected to have an adverse impact on SPNV, Offerpad or any of its subsidiaries;

 

   

issue any debt securities, incur indebtedness for borrowed money in excess of an agreed upon amount, or otherwise incur any indebtedness or assume, guarantee or endorse or otherwise become responsible for the obligations of any other person for indebtedness, except, in each case, (i) in the ordinary course of business consistent with past practice or (ii) under the Inventory Financing Documents (as defined in the Merger Agreement);

 

   

terminate without replacement or amend in a manner materially detrimental to Offerpad and its subsidiaries, taken as a whole, material insurance policies covering Offerpad and its subsidiaries and their respective properties, assets and businesses;

 

   

enter into any agreement that materially restricts the ability of Offerpad or its subsidiaries to engage or compete in any line of business or enter into a new line of business, except where such restriction does not, and would not be reasonably likely to, individually or in the aggregate, materially and adversely affect, or materially disrupt, the ordinary course operation of the businesses of Offerpad and its subsidiaries, taken as a whole;

 

   

enter into, assume, assign, partially or completely amend any material term of or terminate (excluding any expiration in accordance with its terms) any collective bargaining or similar agreement, other than as required by applicable law;

 

   

enter into, modify in any material respect or terminate any contract that is (or would be if entered into prior to the date of the Merger Agreement) a “Material Contract” of the type described in clauses (i), (iii), (iv) or (viii) of Section 5.12(a) of the Merger Agreement, other than in the ordinary course of business;

 

   

enter into or modify in any material respect any affiliate agreement;

 

   

make any payment, distribution, loan or other transfer of value to any related party, other than (i) payments to employees in the ordinary course of business and (ii) payments pursuant to certain affiliate agreements set forth on Offerpad’s disclosure letter;

 

   

fail to maintain, dedicate to the public, allow to lapse, or abandon, including by failure to pay the required fees in any jurisdiction, any material owned intellectual property, excluding any failures, dedications, or allowances made by Offerpad or its subsidiaries in the ordinary course of business, or for any owned intellectual property that is not used or useful in the business of Offerpad and its subsidiaries or is not in Offerpad’s reasonable business judgment, commercially practical to maintain;

 

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acquire, directly or indirectly, by merger, consolidation, acquisition of stock or assets or otherwise, any business, person or assets from any other person with a fair market value or purchase price in excess of $25,000,000 in any individual transaction or series of related transactions or $100,000,000 in the aggregate;

 

   

make any loans, advances, guarantees or capital contributions to or investments in any person, except in the ordinary course of business;

 

   

make or authorize any payment of, or accrual or commitment for, capital expenditures in excess of $5,000,000 for any individual capital expenditure or series of related capital expenditures or $25,000,000 in the aggregate, except in the ordinary course of business;

 

   

cancel, modify or waive any debts or claims held by or owed to Offerpad or any of its subsidiaries having in each case a value in excess of $250,000 individually or $2,000,000 in the aggregate, except in the ordinary course of business; or

 

   

enter into any agreement, or otherwise become obligated, to do any of the foregoing.

Conduct of Business by SPNV

During the Interim Period, SPNV has agreed not to, and to cause each of its subsidiaries not to, except as set forth on SPNV’s disclosure letter, as required by the Merger Agreement, as required by applicable law or as consented to by Offerpad in writing (which consent will not be unreasonably conditioned, withheld, delayed or denied, except in certain cases as described in the Merger Agreement as to which Offerpad’s consent may be granted or withheld in its sole discretion):

 

   

change, modify, supplement, restate or amend the Trust Agreement or the organizational documents of the SPNV Parties;

 

   

declare, set aside or pay any dividends on, or make any other distribution in respect of any outstanding capital stock of, or other equity interests in, SPNV;

 

   

split, combine or reclassify any capital stock of, or other equity interests in, SPNV;

 

   

other than in connection with redemptions of SPNV’s Class A common stock or as otherwise required by SPNV’s organizational documents in order to consummate the Transactions, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any capital stock of, or other equity interests in, SPNV;

 

   

make, change or revoke any material tax election, adopt or change (or request any governmental authority to change) any material accounting method or accounting period with respect to taxes, file any amended material tax return, settle or compromise any material tax liability or claim for a refund of a material amount of taxes, enter into any closing agreement or other binding written agreement with respect to any material tax, or enter into any tax sharing or tax indemnification agreement or similar agreement (excluding commercial contracts not primarily relating to taxes);

 

   

enter into, renew, modify, supplement or amend any transaction or contract with an affiliate of SPNV (including, for the avoidance of doubt, the Sponsor, and, where applicable, (i) anyone related by blood, marriage or adoption to the Sponsor or (ii) any person in which the Sponsor has a direct or indirect legal, contractual or beneficial ownership interest of 5% or greater);

 

   

waive, release, compromise, settle or satisfy any pending or threatened Action or compromise or settle any liability in excess of $500,000 individually or $2,500,000 in the aggregate;

 

   

incur, guarantee or otherwise become liable for (whether directly, contingently or otherwise) any indebtedness, other than any indebtedness incurred by SPNV in order to fund the payment of transaction expenses or otherwise satisfy the SPNV Parties’ obligations under the Merger Agreement or in connection with the Transactions (provided, that any such indebtedness that is incurred after the date of the Merger Agreement must be paid off or otherwise extinguished at or prior to the Closing);

 

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offer, issue, deliver, grant or sell, or authorize or propose to offer, issue, deliver, grant or sell, any capital stock of, other equity interests, equity equivalents, stock appreciation rights, phantom stock ownership interests or similar rights in, SPNV or any of its subsidiaries or any securities convertible into, or any rights, warrants or options to acquire, any such capital stock or equity interests, other than (i) the issuance of SPNV’s Class A common stock in connection with the exercise of any SPNV warrants outstanding on the date of the Merger Agreement or (ii) the issuance of SPNV’s Class A common stock and SPNV warrants, in each case on the terms set forth in the Subscription Agreements and the SPNV Forward Purchase Agreement, as applicable,

 

   

amend, modify or waive any of the terms or rights set forth in, any SPNV warrant or the Warrant Agreement, including any amendment, modification or reduction of the warrant price set forth therein;

 

   

enter into, materially amend, or modify or consent to the termination (excluding any expiration in accordance with its terms) of any contracts to which any SPNV Party is party (including engagement letters with financial advisors) in a manner that would materially and adversely affect any SPNV Party after the Closing or that would impose material liabilities on any SPNV Party after the Closing; or

 

   

enter into any agreement, or otherwise become obligated, to do any of the foregoing.

Covenants of SPNV

Pursuant to the Merger Agreement, SPNV has agreed, among other things, to:

 

   

during the Interim Period, subject to confidentiality obligations that may be applicable to information furnished to SPNV or its subsidiaries by third parties and except for any information which (a) relates to (i) interactions prior to February 12, 2021 with prospective counterparties to a business combination or (ii) the negotiation of the Merger Agreement or the Transactions, (b) is prohibited from being disclosed by applicable law or (c) is subject to attorney-client privilege or other privilege from disclosure, (A) afford (and cause its subsidiaries to afford) Offerpad and its representatives reasonable access to its and its subsidiaries’ properties, assets, books, contracts, commitments, tax returns, records and appropriate officers and employees and (B) use (and cause its subsidiaries to use) reasonable best efforts to furnish Offerpad and such representatives with all financial and operating data and other information concerning its and its subsidiaries’ business and affairs that are in its or its subsidiaries’ possession, in each case as Offerpad and its representatives may reasonably request solely for purposes of consummating the Transactions;

 

   

comply promptly, and in any event no later than ten business days following the date of the Merger Agreement, with the notification and reporting requirements of the HSR Act;

 

   

use its reasonable best efforts to substantially comply with any information or document requests with respect to antitrust matters;

 

   

request early termination of any waiting period(s) under the HSR Act to the extent available and use its reasonable best efforts to undertake promptly any and all action required to (i) obtain termination or expiration of the waiting period under the HSR Act, (ii) prevent the entry in any action brought by an antitrust authority of any governmental order which would prohibit, make unlawful or delay the consummation of the Transactions and (iii) if any such governmental order is issued in any such action, cause such governmental order to be lifted;

 

   

use its reasonable best efforts to cooperate in good faith with the antitrust authorities and use its reasonable best effortst to undertake promptly any and all action required to complete lawfully the Transactions as soon as practicable (but in any event prior to the Termination Date) and, with the prior written consent of Offerpad (not to be unreasonably withheld, conditioned, delayed or denied), all action necessary or advisable to avoid, prevent, eliminate or remove the actual or threatened commencement of any proceeding in any forum by or on behalf of any antitrust authority or the issuance of any governmental order by any antitrust authority that would delay, enjoin, prevent, restrain or otherwise prohibit the consummation of the Transactions;

 

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promptly furnish to Offerpad copies of any material notices or written communications received by it or any of its affiliates from any antitrust authority with respect to the Transactions, and permit counsel to Offerpad an opportunity to review in advance, and consider in good faith the views of such counsel in connection with any proposed written communications by it and/or its affiliates to any antitrust authority concerning the Transactions;

 

   

after the First Effective Time, indemnify and hold harmless each present and former director, manager and officer of Offerpad and SPNV and each of their respective subsidiaries against any costs, expenses, judgments, fines, losses, damages or liabilities incurred in connection with any Action, to the fullest extent that it, Offerpad or their respective subsidiaries would have been permitted under applicable law and their applicable governing documents in effect on the date of the Merger Agreement to indemnify such person;

 

   

cause Offerpad Solutions and its subsidiaries to maintain, for a period of not less than six years from the First Effective Time, provisions in its governing documents and those of its subsidiaries concerning the indemnification, exculpation and exoneration of officers and directors/managers, that are no less favorable to those persons than the provisions of such governing documents as of the date of the Merger Agreement;

 

   

maintain, and cause one or more of its subsidiaries to maintain, a directors’ and officers’ liability insurance policy covering those persons who are currently covered by Offerpad’s or any of its subsidiaries’ directors’ and officers’ liability insurance policies on terms not less favorable than the terms of such current insurance coverage, except that in no event will it be required to pay an annual premium for such insurance in excess of 500% of the last annual payment made by Offerpad or any of its affiliates for such directors’ and officers’ liability insurance policies currently in effect as of the date of the Merger Agreement;

 

   

maintain, and cause one or more of its subsidiaries to maintain, a directors’ and officers’ liability insurance policy covering those persons who are currently covered by SPNV’s or any of its subsidiaries’ directors’ and officers’ liability insurance policies on terms not less favorable than the terms of such current insurance coverage, except that in no event will it be required to pay an annual premium for such insurance in excess of 500% of the last annual payment made by SPNV or any of its affiliates for such directors’ and officers’ liability insurance policies currently in effect as of the date of the Merger Agreement;

 

   

use reasonable best efforts to take, or to cause to be taken, all actions and do, or cause to be done, all things required, necessary, proper or advisable to consummate the transactions contemplated by the Subscription Agreements and the SPNV Forward Purchase Agreement on the terms and conditions described therein, including by enforcing its rights (i) under the Subscription Agreements to cause the PIPE Investors to pay to (or as directed by) it the applicable purchase price under each PIPE Investor’s applicable Subscription Agreement in accordance with its terms and (ii) under the SPNV Forward Purchase Agreement to cause the purchasers thereunder to pay to (or as directed by) it the applicable purchase price under the SPNV Forward Purchase Agreement in accordance with the terms therein, without permitting any amendment or modification to any of the Subscription Agreements or the SPNV Forward Purchase Agreement (unless approved in writing by Offerpad);

 

   

if any Subscription Agreement expires or is terminated, withdrawn or repudiated by any party thereto prior to the Closing, such that the aggregate amount of PIPE Investment as of the Closing is expected to be below $200,000,000 (a “PIPE Financing Shortfall”), use its reasonable best efforts to procure one or more investors reasonably acceptable to Offerpad to enter into Subscription Agreements with SPNV fora PIPE Investment on substantially the same terms and in any amount at least equal to the amount of the PIPE Investment under the Subscription Agreement that has expired or been terminated, withdrawn or repudiated or otherwise in form and substance reasonably satisfactory to Offerpad;

 

   

during the Interim Period, use its reasonable best efforts to ensure it remains listed as a public company on, and for shares of its Class A common stock and warrants (but, in the case of its warrants, only to the extent issued as of the date of the Merger Agreement) to be listed on, the NYSE;

 

   

prior to the Closing, prepare and submit to NYSE a listing application, if required under NYSE rules, covering the shares of SPNV’s Class A common stock issuable in the Mergers, and obtain approval for the listing of such shares of SPNV’s Class A common stock;

 

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during the Interim Period, use reasonable best efforts to keep current and timely file all reports required to be filed or furnished with the SEC and to otherwise comply in all material respects with its reporting obligations under applicable securities laws;

 

   

prior to the First Effective Time, take all reasonable steps as may be required (to the extent permitted under applicable law) to cause any acquisition or disposition of its Class A common stock or any derivative thereof that occurs or is deemed to occur by reason of or pursuant to the Transactions by each Person who is or will be or may be subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to SPNV to be exempt under Rule 16b-3 promulgated under the Exchange Act;

 

   

take all actions necessary to ensure the individuals listed on Offerpad’s disclosure letter (so long as, with respect to any such individual, he or she is able and willing to serve) are elected and appointed as directors of Offerpad Solutions effective at the Closing;

 

   

take all actions necessary to ensure that the officers of Offerpad as of immediately prior to the Closing will be the officers of Offerpad Solutions effective at the closing;

 

   

prior to the Closing Date, subject to approval of the stockholders of SPNV, adopt the 2021 Plan and the ESPP;

 

   

within five business days following the expiration of the sixty-day period after it has filed current Form 10 information with the SEC reflecting its status as an entity that is not a shell company, file an effective registration statement on Form S-8 (or other applicable form) with respect to its Offerpad Solutions Class A common stock issuable under the 2021 Plan and the ESPP and use reasonable efforts to maintain the effectiveness of such registration statement(s) (and the current status of the prospectus or prospectuses contained therein) for so long as awards granted thereunder remain outstanding;

 

   

during the Interim Period, use reasonable best efforts to (i) take all actions necessary to continue to qualify as an “emerging growth company” within the meaning of the JOBS Act and (ii) not take any action that would cause it to not qualify as an “emerging growth company” within the meaning of the JOBS Act; and

 

   

(i) during the Interim Period, not take, and direct its affiliates and representatives not to take, whether directly or indirectly, any action to solicit, initiate, continue or engage in any discussions or negotiations with, or enter into any agreement with, or knowingly encourage, respond to, provide information to or commence due diligence with respect to, any person (other than Offerpad, its stockholders and/or any of their affiliates or representatives) concerning, relating to or which is intended or is reasonably likely to give rise to or result in, any offer, inquiry, proposal or indication of interest, written or oral relating to any business combination (a “Business Combination Proposal”) other than with Offerpad, its shareholders and their respective affiliates and representatives and (ii) immediately cease, and direct its representatives to immediately cease, any and all existing discussions or negotiations with any person conducted prior to the date of the Merger Agreement with respect to, or which is reasonably likely to give rise to or result in, a Business Combination Proposal.

Covenants of Offerpad

Pursuant to the Merger Agreement, Offerpad has agreed, among other things, to:

 

   

in the event of a PIPE Financing Shortfall, (i) cooperate in good faith and promptly take such actions as may be reasonably requested by SPNV, prior to the Closing, to assist SPNV in procuring one or more investors reasonably acceptable to Offerpad to enter into Subscription Agreements to cure such PIPE Financing Shortfall and (ii) cause the senior executives of Offerpad to participate, upon reasonable advance notice thereof, in presentations to, and communications with, such potential investors;

 

   

prior to the Closing, reasonably cooperate with SPNV with respect to the NYSE listing application covering the shares of SPNV’s Class A common stock issuable in the Mergers.

 

   

take all actions necessary to ensure that the officers of Offerpad as of immediately prior to the Closing will be the officers of Offerpad Solutions effective at the Closing;

 

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during the Interim Period, subject to confidentiality obligations that may be applicable to information furnished to Offerpad or any of its subsidiaries by third parties and except for any information which (a) relates to (i) interactions prior to February 12, 2021 with prospective counterparties to a business combination or (ii) the negotiation of the Merger Agreement or the Transactions, (b) is prohibited from being disclosed by applicable law or (c) is subject to attorney-client privilege or other privilege from disclosure, and to the extent permitted by applicable law, (A) afford (and cause its subsidiaries to afford) SPNV and its representatives reasonable access to its and its subsidiaries’ properties, assets, books, contracts, commitments, tax returns, records and appropriate officers and employees and (B) use (and cause its subsidiaries to use) reasonable best efforts to furnish SPNV and such representatives with all financial and operating data and other information concerning its and its subsidiaries’ business and affairs that are in its or its subsidiaries’ possession, in each case as SPNV and its representatives may reasonably request solely for purposes of consummating the Transactions;

 

   

comply promptly, and in any event no later than ten business days following the date of the Merger Agreement, with the notification and reporting requirements of the HSR Act;

 

   

use its reasonable best efforts to substantially comply with any information or document requests with respect to antitrust matters;

 

   

request early termination of any waiting period(s) under the HSR Act to the extent available;

 

   

promptly furnish to SPNV copies of any material notices or written communications received by it or any of its subsidiaries from any antitrust authority, and detail any substantive oral communications between it or any of its subsidiaries and any antitrust authority, with respect to the approval of the Transactions, and permit counsel to SPNV an opportunity to review in advance, and consider in good faith the views of such counsel in connection with, any proposed written communications by it and/or its subsidiaries to any antitrust authority concerning the Transactions;

 

   

on behalf of itself and its subsidiaries, affiliates and its and their respective representatives, waive any past, present or future Action of any kind against, and any right to access, the Trust Account or to collect from the Trust Account any monies that may be owed to them for any reason whatsoever, and not seek recourse against the Trust Account at any time for any reason whatsoever;

 

   

at the Closing, deliver to SPNV the FIRPTA certification and notice;

 

   

(i) obtain and deliver to SPNV Offerpad Stockholder Approval in the form of a written consent executed by certain stockholders of Offerpad as soon as reasonably practicable after the Registration Statement is declared effective under the Securities Act, and in any event within 72 hours after the Registration Statement is declared effective; (ii) take all other action necessary or advisable to secure Offerpad Stockholder Approval and, if applicable, any additional consents or approvals of its stockholders related thereto; and (iii) use its reasonable best efforts to obtain and deliver to SPNV, prior to the Closing, the approval of the Merger Agreement and the Transactions, including the Mergers, the Pre-Closing Restructuring and the making of any filings, notices or information statements in connection with the foregoing, from all of the holders of Offerpad stock (including those that did not execute the Offerpad Holders Support Agreement), in the form of a written consent executed by such stockholders of Offerpad as soon as reasonably practicable after the Registration Statement is declared effective under the Securities Act;

 

   

prior to the Closing, terminate, or cause to be terminated, without liability to or any payment by SPNV, Offerpad or any of its subsidiaries, all affiliate agreements other than certain agreements set forth on Offerpad’s disclosure letter and provide evidence to SPNV that such affiliate agreements have been terminated effective prior to the Closing;

 

   

as soon as reasonably practicable following the date of the Merger Agreement, any in any event no later than April 30, 2021 (such date, as it may be extended, the “PCAOB Audit Deadline”), deliver to SPNV the PCAOB Audited Financial Statements; provided, that if Offerpad has not delivered the PCAOB Audited Financial Statements by the then applicable PCAOB Audit Deadline, the PCAOB Audit Deadline shall be

 

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extended by one week if (i) Offerpad continues to use its reasonable best efforts to deliver the PCAOB Audited Financial Statements as soon as reasonably practicable and (ii) there is a reasonable expectation that the Company will deliver the PCAOB Audited Financial Statements by June 17, 2021;

 

   

at or prior to the Closing, use its reasonable best efforts to deliver to SPNV the Credit Agreement Amendments and Payoff Letters (as such terms are defined in the Merger Agreement), in each case, in form and substance reasonably satisfactory to Acquiror;

 

   

during the Interim Period, take certain actions in connection with the Pre-Closing Restructuring (see “—Certain Agreements Related to the Business Combination—Merger AgreementPre-Closing Restructuring” above);