Finance of America Companies Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Payables and Other Liabilities

Payables and Other Liabilities

9 Months Ended

Sep. 30, 2021

18.	Payables and Other Liabilities

Payables and other liabilities consisted of the following (in thousands):


	September 30, 2021		December 31, 2020
	Successor		Predecessor
Accrued compensation expense	$	150,821	$	150,214
Accrued liabilities		135,747		83,427
Lease liabilities		61,846		48,250
Deferred purchase price liabilities		47,317		3,842
Ginnie Mae reverse mortgage buy-out payable		36,574		32,317
Deferred tax liability, net		27,213		—
Estimate of claim losses		14,015		8,609
Derivative liabilities		11,783		20,722
Warrant liability		9,342		—
Repurchase reserves		7,879		10,529
Liability for loans eligible for repurchase from Ginnie Mae		7,266		42,148

Total payables and other liabilities	$	509,803	$	400,058

Warrants

Prior to the Business Combination, Replay issued 28,750,000 units, consisting of one ordinary share and

one-half

of one redeemable warrant (each, a “Public Warrant” or “Warrant”), resulting in 14,375,000 Public Warrants. Each Warrant is now exercisable for a share of FoA Class A Common Stock. As of September 30, 2021 (Successor), there were 14,375,000 Public Warrants outstanding.

The Warrants will expire April 1, 2026, five years after the completion of the Business Combination. The Company may call the Warrants for redemption:

•

in whole and note in part;

•

at a price of $0.01 per warrant;

•

upon a minimum of 30 days’ prior written notice of redemption;

•

if, and only if, the last reported closing price of the Class A Common Stock equals or exceeds $18.00 per share for any 20 trading days within a

30-trading

day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders; and

Each Warrant entitles the holder to purchase one ordinary share at a price of $11.50 per share, subject to adjustment for reorganization and/or extraordinary dividends event, as described in the warrant agreement.

If the Company calls the Warrants for redemption, management will have the option to require all holders that wish to exercise the warrants to do so on a “cashless basis,” as described in the warrant agreement.

The Company has determined that the Warrants are subject to treatment as a liability. As of the Closing of the Business Combination on April 1, 2021 and as of September 30, 2021 (Successor), the Warrants had a fair value of $18.0 million and $9.3 million, respectively. These liability-classified Public Warrants are out of the money and thus have no impact on diluted EPS.