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

6 Months Ended

Jun. 30, 2021

19.	Payables and Other Liabilities

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


	June 30, 2021		December 31, 2020
	Successor		Predecessor
Accrued compensation expense	$	131,831	$	150,214
Accrued liabilities		97,902		83,427
Lease liabilities		64,496		48,250
Deferred tax liability, net		28,455		—
GNMA reverse mortgage buy-out payable		32,607		32,317
Liability for loans eligible for repurchase from GNMA		30,027		42,148
Derivative liabilities		19,329		20,722
Warrant liability		19,261		—
Estimate of claim losses		11,839		8,609
Deferred purchase price liabilities		44,473		3,842
Repurchase reserves		8,515		10,529

Total payables and other liabilities	$	488,735	$	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 June 30, 2021 (Successor), there were

14,375,000

Public Warrants outstanding.

The

arrants will expire April 1, 2026, five years after the completion of the Business Combination. The Company may call the

arrants 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 June 30, 2021 (Successor), the Warrants had a fair value of $18.0 million and $19.3 million,

respectively. These liability-classified Public Warrants are out of the money and thus have no impact on diluted EPS.