As filed with the Securities and Exchange Commission on May 14, 2021.

Registration No. 333-      ​

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-4

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933​

FIFTH WALL ACQUISITION CORP. I
(Exact name of registrant as specified in its charter)

6060 Center Drive
10th Floor
Los Angeles, California 90045
(310) 853-8878

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

Brendan Wallace
6060 Center Drive
10th Floor
Los Angeles, California 90045
(310) 853-8878

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

Copies to

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this registration statement becomes effective and upon completion of the merger.

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.   ☐

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, a smaller reporting company, or 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.:

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 ☒ 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-1(d) (Cross-Border Third-Party Tender Offer)    ☐

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 of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

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(1)

Based on the maximum number of shares of Class A common stock, par value $0.0001 per share (“Class A common stock”), of the registrant estimated to be issued upon consummation of the Business Combination (as defined herein). This number is based on the product of (a) the sum of (i) 2,626,878, the aggregate number of shares of common stock, par value $0.00001 per share, of SmartRent.com, Inc. (“SmartRent”), (ii) 24,815,516, the aggregate number of shares of preferred stock, par value $0.00001 per share, of SmartRent, and (iii) 1,166,621, the aggregate number of shares of SmartRent common stock underlying outstanding SmartRent warrants to purchase SmartRent common stock, in each case outstanding as of the date hereof, and (b) an estimated Exchange Ratio (as defined herein) of 4.8846.

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(2)

Pursuant to Rules 457(c) and 457(f)(1) promulgated under the Securities Act and solely for the purpose of calculating the registration fee, the proposed maximum aggregate offering price is an amount equal to $1,546,961,596.65, calculated as the product of (i) 139,743,595 shares of Class A common stock, the estimated maximum number of shares of Class A common stock that may be issued in the Business Combination (as calculated as provided in note (1) above) and (ii) $11.07, the average of the high and low trading prices of Class A common stock on May 10, 2021 (within five business days prior to the date of this Registration Statement).

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(3)

Calculated pursuant to Rule 457 of the Securities Act by multiplying the proposed maximum aggregate offering price of securities to be registered by 0.0001091.

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The information in this preliminary proxy statement/prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is 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 state where the offer or sale is not permitted.

PRELIMINARY PROXY STATEMENT/PROSPECTUS
DATED MAY 14, 2021 SUBJECT TO COMPLETION

FIFTH WALL ACQUISITION CORP. I

6060 Center Drive
10th Floor
Los Angeles, California 90045

Dear Stockholder:

On April 21, 2021, Fifth Wall Acquisition Corp. I (“FWAA”) and Einstein Merger Corp. I, a wholly owned subsidiary of FWAA (“Merger Sub”), entered into a Merger Agreement (as it may be amended, supplemented or otherwise modified from time to time in accordance with its terms, the “Merger Agreement”) with SmartRent.com, Inc. (“SmartRent”). If the transactions contemplated by the Merger Agreement are completed, Merger Sub will merge with and into SmartRent, with SmartRent surviving the merger as a wholly owned subsidiary of FWAA (the “Business Combination”).

As part of the Business Combination, SmartRent equityholders (including holders of warrants, options and restricted stock units (“RSUs”)) will receive aggregate merger consideration of 157,678,300 shares of FWAA Class A common stock (the “merger consideration”). The merger consideration will represent approximately 72.5% of the issued and outstanding shares of FWAA common stock immediately following completion of the Business Combination on a fully diluted basis, assuming no FWAA public stockholder exercises redemption rights in connection with completion of the Business Combination. Assuming a value of $10.00 per FWAA Class A share, which is the price at which FWAA completed its initial public offering in February 2021, the aggregate merger consideration implies an aggregate equity value for SmartRent of approximately $1.58 billion.

Under the terms of the Merger Agreement, immediately prior to the effective time of the Business Combination, SmartRent will cause each share of SmartRent preferred stock issued and outstanding to be automatically converted into a number of shares of SmartRent common stock in accordance with SmartRent’s charter (the “preferred stock conversion”). At the effective time of the Business Combination, each share of SmartRent common stock issued and outstanding immediately prior to the closing of the Business Combination (including shares of SmartRent common stock issued in the preferred stock conversion prior to the closing) will be cancelled and converted into the right to receive a pro rata portion of the merger consideration based on the number of shares of SmartRent capital stock outstanding before completion of the Business Combination on a fully diluted basis, as further described in the attached proxy statement/​prospectus. See the section entitled “The Business Combination” on page 164 of the attached proxy statement/​prospectus for further information on the per share consideration being paid to the equityholders of SmartRent in the Business Combination.

FWAA Class A common stock is publicly traded on The Nasdaq Stock Market LLC (“Nasdaq”). We intend to apply to list the FWAA Class A common stock to be issued in connection with the Business Combination on the Nasdaq under the symbol “SMRT” upon the closing of the Business Combination. Following the Closing, FWAA intends to change its name to SmartRent, Inc.

In connection with the execution of the Merger Agreement, FWAA entered into subscription agreements (collectively, the “Subscription Agreements”) with certain parties subscribing for shares of FWAA Class A common stock (the “Subscribers”), pursuant to which the Subscribers have agreed to purchase, and FWAA has agreed to sell to the Subscribers, an aggregate of 15,500,000 shares of FWAA Class A common stock, for a purchase price of $10.00 per share and at an aggregate purchase price of $155.0 million. The obligations to complete the transactions contemplated by the Subscription Agreements are conditioned upon, among other things, customary closing conditions and the completion of the transactions contemplated by the Merger Agreement, including the Business Combination. See “Other Agreements — Subscription Agreements.”

FWAA and SmartRent cannot complete the Business Combination unless (i) FWAA’s stockholders consent to the approval of the Merger Agreement and the transactions contemplated thereby, including the issuance of FWAA Class A common stock to be issued as the merger consideration pursuant to the Business Combination and (ii) SmartRent’s stockholders consent to adoption and approval of the Merger Agreement and the transactions contemplated thereby. FWAA is sending you this proxy statement/prospectus to ask you to vote in favor of these and the other matters described in this proxy statement/prospectus.

FWAA will hold a special meeting of stockholders in lieu of the 2021 annual meeting of its stockholders (the “Special Meeting”) to consider matters relating to the proposed Business Combination. The Special Meeting will be held at [•] a.m. Eastern Time, on [•], 2021, in virtual format.

YOUR VOTE IS VERY IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES OF COMMON STOCK YOU OWN. To ensure your representation at the Special Meeting, please complete and return the enclosed proxy card or submit your proxy by following the instructions contained in this proxy statement/prospectus and on your proxy card. Please submit your proxy promptly whether or not you expect to attend the meeting. Submitting a proxy now will NOT prevent you from being able to vote in person (including presence at a virtual meeting) at the meeting. If you hold your shares in “street name,” you should instruct your broker, bank, or other nominee how to vote in accordance with the voting instruction form you receive from your broker, bank, or other nominee.

The FWAA board of directors has unanimously approved the Merger Agreement and the transactions contemplated thereby and recommends that FWAA stockholders vote “FOR” the approval of the Merger Agreement, “FOR” the issuance of Class A common stock to be issued pursuant to the Business Combination and “FOR” the other matters to be considered at the Special Meeting.

The SmartRent board of directors (including any required committee or subgroup thereof) has approved the Merger Agreement and the transactions contemplated thereby and recommends that SmartRent stockholders consent to adopt and approve in all respects the Merger Agreement and the transactions contemplated thereby.

This proxy statement/prospectus provides you with detailed information about the proposed Business Combination. It also contains or references information about FWAA and SmartRent and certain related matters. You are encouraged to read this proxy statement/prospectus carefully. In particular, you should read the “Risk Factors” section beginning on page 24 for a discussion of the risks you should consider in evaluating the proposed Business Combination and how it will affect you.

If you have any questions regarding the accompanying proxy statement/prospectus, you may contact our proxy solicitor, Innisfree M&A Incorporated:

Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, NY 10022
Stockholders may call toll free: (877) 456-3402
Banks and Brokers may call collect: (212) 750-5833

Sincerely,
Brendan Wallace
Chief Executive Officer and Chairman of the Board of Directors

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the Business Combination, the issuance of shares of FWAA Class A common stock in connection with the Business Combination or the other transactions described in this proxy statement/prospectus, or passed upon the adequacy or accuracy of the disclosure in this proxy statement/prospectus. Any representation to the contrary is a criminal offense.

This proxy statement/prospectus is dated [•], 2021, and is first being mailed to stockholders of FWAA on or about [•], 2021.

 

FIFTH WALL ACQUISITION CORP. I
6060 Center Drive
10th Floor
Los Angeles, California 90045
(310) 853-8878

NOTICE OF
SPECIAL MEETING IN LIEU OF THE 2021 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON [•], 2021

TO THE STOCKHOLDERS OF FWAA:

NOTICE IS HEREBY GIVEN that a special meeting in lieu of the 2021 annual meeting of stockholders of Fifth Wall Acquisition Corp. I, a Delaware corporation (“FWAA”), will be held at [•] a.m. Eastern Time, on [•], 2021, in virtual format (the “Special Meeting”). You are cordially invited to attend the Special Meeting, which will be held for the following purposes:

(1)

The Business Combination Proposal — To consider and vote upon a proposal to approve the Merger Agreement, dated as of April 21, 2021 (as it may be amended, supplemented or otherwise modified from time to time in accordance with its terms, the “Merger Agreement”), by and among FWAA, Einstein Merger Corp. I, a Delaware corporation and wholly owned subsidiary of FWAA (“Merger Sub”), and SmartRent.com, Inc., a Delaware corporation (“SmartRent”), and the transactions contemplated thereby, pursuant to which Merger Sub will merge with and into SmartRent with SmartRent surviving the merger as a wholly owned subsidiary of FWAA (the “Business Combination,” and such proposal, the “Business Combination Proposal”). A copy of the Merger Agreement is attached to this proxy statement/prospectus as Annex A;

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(2)

The Charter Proposal — To consider and vote upon a proposal to adopt the Third Amended and Restated Certificate of Incorporation (the “Proposed Charter”) in the form attached hereto as Annex B (the “Charter Proposal”);

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(3)

The Governance Proposal — To consider and act upon, on a non-binding advisory basis, a separate proposal with respect to certain governance provisions in the Proposed Charter in accordance with the requirements of the Securities and Exchange Commission (the “Governance Proposal”);

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(4)

The Director Election Proposal — To consider and vote upon a proposal to elect seven directors to serve on the Board of Directors of the Post-Combination Company (the “Board”) until the 2022 annual meeting of stockholders, in the case of Class I directors, the 2023 annual meeting of stockholders, in the case of Class II directors, and the 2024 annual meeting of stockholders, in the case of Class III directors, and, in each case, until their respective successors are duly elected and qualified (the “Director Election Proposal”);

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(5)

The Nasdaq Proposal — To consider and vote upon a proposal to approve, for purposes of complying with applicable listing rules of The Nasdaq Stock Market LLC (the “Nasdaq”): (i) the issuance of shares of FWAA Class A common stock to SmartRent stockholders pursuant to the Merger Agreement; (ii) the issuance of shares of FWAA Class A common stock pursuant to the Subscription Agreements; and (iii) the issuance of shares of FWAA Class A common stock pursuant to the conversion of FWAA Class B common stock (the “Nasdaq Proposal”);

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(6)

The Equity Incentive Plan Proposal — To consider and vote upon a proposal to approve and adopt the SmartRent, Inc. 2021 Equity Incentive Plan (the “Equity Incentive Plan Proposal”);

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(7)

The Employee Stock Purchase Plan Proposal — To consider and vote upon a proposal to approve and adopt the SmartRent, Inc. 2021 Employee Stock Purchase Plan (the “Employee Stock Purchase Plan Proposal”); and

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(8)

The Adjournment Proposal — To consider and vote upon a proposal to approve the adjournment of the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of

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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 Director Election Proposal, the Nasdaq Proposal, the Equity Incentive Plan Proposal or the Employee Stock Purchase Plan Proposal (the “Adjournment Proposal” and, together with the Business Combination Proposal, the Charter Proposal, the Governance Proposal, the Nasdaq Proposal, the Director Election Proposal, the Equity Incentive Plan Proposal and the Employee Stock Purchase Plan Proposal, each, a “Proposal” and collectively, the “Proposals”).

These items of business are described in the attached proxy statement/prospectus, which we encourage you to read in its entirety before voting. Only holders of record of FWAA common stock at the close of business on [•], 2021 (the “FWAA Record Date”) 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 of the Special Meeting.

Pursuant to FWAA’s Existing Charter (as defined herein), FWAA will provide holders of its Class A common stock with the opportunity to redeem their Public Shares (as defined herein) for cash equal to their pro rata share of the aggregate amount on deposit in the Trust Account (as defined herein), which holds the proceeds of FWAA’s initial public offering, as of two business days prior to the consummation of the transactions contemplated by the Business Combination Proposal (including interest earned on the funds held in the Trust Account and not previously released to FWAA to pay its taxes). For illustrative purposes, based on funds in the Trust Account of approximately $345.0 million on April 21, 2021, the estimated per share redemption price would have been approximately $10.00, excluding additional interest earned on the funds held in the Trust Account and not previously released to FWAA to pay taxes. Public stockholders (as defined herein) may elect to redeem their shares even if they vote for the Business Combination Proposal. A holder of Public Shares, together with any affiliate of his or any other person with whom he is acting in concert or as a “group” ​(as defined in Section 13(d)(3) of the Exchange Act (as defined herein)), will be restricted from seeking redemption rights with respect to more than 15% of the Public Shares without the consent of FWAA. 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 without the consent of FWAA. Fifth Wall Acquisition Sponsor, LLC, our sponsor (the “Sponsor”), and FWAA’s independent directors have entered into a letter agreement with FWAA pursuant to which they agreed to waive their redemption rights in connection with the consummation of the Business Combination with respect to any shares of common stock they may hold. Currently, the Sponsor and FWAA’s independent directors own 21.9% of FWAA common stock, consisting of the Founder Shares and the Private Placement Shares (each, as defined herein). Founder Shares and Private Placement Shares will be excluded from the pro rata calculation used to determine the per-share redemption price.

The Sponsor and FWAA’s independent directors have also agreed to vote all shares of FWAA common stock owned by them in favor of the Business Combination Proposal presented at the Special Meeting.

After careful consideration, FWAA’s board of directors (the “FWAA Board”) has determined that the Business Combination Proposal, the Charter Proposal, the Governance Proposal, the Director Election Proposal, the Nasdaq Proposal, the Equity Incentive Plan Proposal, the Employee Stock Purchase Plan Proposal and the Adjournment Proposal are fair to and in the best interests of FWAA 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 Director Election Proposal, “FOR” the Nasdaq Proposal, “FOR” the Equity Incentive Plan Proposal “FOR” the Employee Stock Purchase Plan Proposal, and “FOR” the Adjournment Proposal, if presented.

The approval of the Business Combination Proposal requires the affirmative vote of the holders of a majority of the shares of Class A common stock and Class B common stock that are voted at the Special Meeting, voting as a single class. The approval of each of the Governance Proposal, the Nasdaq Proposal, the Equity Incentive Plan Proposal, the Employee Stock Purchase Plan Proposal and the Adjournment Proposal, if presented, requires the affirmative vote of a majority of the votes cast by the holders of shares of Class A common stock and Class B common stock, present in person (including presence at a virtual meeting) or represented by proxy, voting as a single class. The approval of the Charter Proposal requires the affirmative vote of (i) the holders of a majority of the outstanding shares of Class B common stock, voting separately as a single class; and (ii) a majority of the outstanding shares of Class A common stock and

 

 

Class B common stock, voting as a single class, in each case present in person (including presence at a virtual meeting) or represented by proxy.

The approval of the Director Election Proposal requires the affirmative vote of a plurality of the votes cast by the holders of Class A common stock and Class B common stock, present in person (including presence at a virtual meeting) or represented by proxy, voting as a single class.

Consummation of the Business Combination is conditioned on the approval of the Business Combination Proposal, the Charter Proposal and the Nasdaq Proposal at the Special Meeting, subject to the terms of the Merger Agreement. The Business Combination is not conditioned on the Governance Proposal, the Director Election Proposal, the Equity Incentive Plan Proposal, the Employee Stock Purchase Plan Proposal or the Adjournment Proposal. If the Business Combination Proposal is not approved, the other Proposals (except the Adjournment Proposal) will not be presented to the stockholders for a vote. The proxy statement/prospectus accompanying this notice explains the Merger Agreement and the transactions contemplated thereby, as well as the Proposals to be considered at the Special Meeting. Please review the proxy statement/prospectus carefully.

All FWAA stockholders are cordially invited to attend the Special Meeting in virtual format. A list of stockholders entitled to vote at the Special Meeting will be available for inspection for the 10 days prior to the meeting during regular business hours at 6060 Center Drive, 10th Floor, Los Angeles, California 90045, and during the meeting will be available through the special meeting website. FWAA stockholders may attend, vote and examine the list of FWAA stockholders entitled to vote at the Special Meeting by visiting and entering the control number found on their proxy card, voting instruction form or notice included in their proxy materials. In light of public health concerns regarding the coronavirus (“COVID-19”) pandemic, the Special Meeting will be held in virtual meeting format only. You will not be able to attend the Special Meeting physically. To ensure your representation at the Special Meeting, 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, bank, or other nominee on how to vote your shares.

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.

If you have any questions or need assistance voting your shares, please call our proxy solicitor, Innisfree M&A Incorporated:

Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, NY 10022
Stockholders may call toll free: (877) 456-3402
Banks and Brokers may call collect: (212) 750-5833

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

By Order of the Board of Directors

   

Brendan Wallace
Chief Executive Officer and Chairman of the
Board of Directors

[•], 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 FWAA REDEEM YOUR SHARES FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER

 

 

YOUR SHARES TO FWAA’s TRANSFER AGENT AT LEAST TWO (2) BUSINESS DAYS PRIOR TO THE VOTE AT THE SPECIAL MEETING. YOU MAY TENDER YOUR SHARES 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 WILL NOT BE REDEEMED FOR CASH. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANKS OR BROKERS TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS. SEE “FWAA’S SPECIAL MEETING OF STOCKHOLDERS — REDEMPTION RIGHTS” FOR MORE SPECIFIC INSTRUCTIONS.

 

 

TABLE OF CONTENTS

 

 

 

 

BASIS OF PRESENTATION AND GLOSSARY

As used in this proxy statement/prospectus, unless otherwise noted or the context otherwise requires, references to:

“Class A common stock” or “FWAA Class A common stock” are to the shares of FWAA’s Class A common stock, par value $0.0001 per share, prior to the Business Combination, and to shares of the Post-Combination Company’s common stock, par value $0.0001 per share, after the Business Combination;

“Class B common stock” or “FWAA Class B common stock” are to the shares of FWAA’s Class B common stock, par value $0.0001 per share;

“Closing” are to the closing of the Business Combination;

“Code” are to the U.S. Internal Revenue Code of 1986, as amended;

“common stock” or “FWAA common stock” are to the FWAA Class A common stock and FWAA Class B common stock prior to the Business Combination, and to shares of the Post-Combination Company’s common stock, after the Business Combination;

“Company” or “SmartRent” are to SmartRent.com, Inc.;

“Completion Window” are to the period beginning on the closing date of the FWAA IPO (as defined below) and ending on the 24 month anniversary of such date during which FWAA seeks to complete an initial business combination pursuant to the terms of its Existing Charter (as defined below).

“DGCL” are to the Delaware General Corporation Law, as may be amended from time to time;

“Effective Time” are to the effective time of the Business Combination;

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

“Exchange Ratio” are to the quotient of (x) the aggregate merger consideration of 157,678,300 shares of FWAA Class A common stock, divided by (y) the number of shares of SmartRent common stock and SmartRent preferred stock outstanding immediately prior to the Effective Time, expressed on a fully diluted and as-converted basis to SmartRent’s common stock using the treasury method of accounting, and including, without duplication, (i) the number of shares of SmartRent’s common stock issued or issuable in the preferred stock conversion, and the exercise of warrants (assuming that all warrants have been exercised), (ii) the aggregate number of shares issuable upon the exercise of all SmartRent options, whether vested or unvested, outstanding immediately prior to the Effective Time in accordance with their respective terms and (iii) the aggregate number of shares of common stock underlying SmartRent RSUs;

“Existing Charter” are to the Second Amended and Restated Certificate of Incorporation of Fifth Wall Acquisition Corp. I., dated February 4, 2021, as amended;

“Fifth Wall” and “Fifth Wall Group” are to Fifth Wall Asset Management, LLC and Fifth Wall Ventures Management, LLC, collectively with their affiliates and any investment funds, investment vehicles or accounts managed or advised by any of the foregoing (each such fund, vehicle or account, a “Fifth Wall Fund”). FWAA (as defined herein) is sponsored by Sponsor (as defined herein), which is an affiliate of Fifth Wall. However, FWAA is an independent publicly traded company, and not a member of Fifth Wall or the Fifth Wall Group. Fifth Wall has not and is not providing investment advice to any person in connection with the matters contemplated herein, including FWAA, Sponsor or SmartRent;

“Founder Shares” are to the shares of FWAA Class B common stock and FWAA Class A common stock issued upon the automatic conversion thereof at the time of FWAA’s initial business combination as provided herein. The 8,625,000 Founder Shares are held of record by the Sponsor and FWAA’s independent directors as of the FWAA Record Date;

“FWAA” are to Fifth Wall Acquisition Corp. I, a Delaware corporation;

“FWAA IPO” are to the initial public offering by FWAA, which closed on February 9, 2021;

 

i

 

“GAAP” are to generally accepted accounting principles in the United States, as applied on a consistent basis;

“Investment Company Act” are to the Investment Company Act of 1940, as amended;

“Investment Management Trust Agreement” are to that certain investment management trust agreement, dated February 4, 2021, by and between FWAA and Continental Stock Transfer & Trust Company, a New York limited purpose trust company, as trustee;

“Merger Sub” are to Einstein Merger Corp. I, a Delaware corporation and wholly owned subsidiary of FWAA;

“Moelis” are to Moelis & Company LLC;

“Post-Combination Company” are to FWAA following the consummation of the Business Combination and the other transactions contemplated by the Merger Agreement;

“Private Placement Shares” are to the 1,047,500 shares of FWAA Class A common stock issued to FWAA’s sponsor in a private placement simultaneously with the closing of the FWAA IPO;

“Public Shares” are to shares of FWAA Class A common stock sold in the FWAA IPO (whether they were purchased in the FWAA IPO or thereafter in the open market);

“public stockholders” are to the holders of FWAA’s Public Shares, including the Sponsor and FWAA’s management team to the extent the Sponsor and/or members of the FWAA management team purchase Public Shares; provided, that the Sponsor’s and each member of the management team’s status as a “public stockholder” will only exist with respect to such Public Shares;

“SEC” are to the U.S. Securities and Exchange Commission;

“Securities Act” are to the Securities Act of 1933, as amended;

“SmartRent common stock” are to shares of SmartRent’s common stock, par value $0.00001 per share;

“SmartRent preferred stock” are to the shares of SmartRent Series Seed Preferred Stock, the SmartRent Series A Preferred Stock, the SmartRent Series B Preferred Stock, the SmartRent Series B-1 Preferred Stock, the SmartRent Series C Preferred Stock, and the SmartRent Series C-1 Preferred Stock, collectively;

“SmartRent Series A Preferred Stock” are to the shares of SmartRent’s Series A Preferred Stock, par value $0.00001 per share;

“SmartRent Series B Preferred Stock” are to the shares of SmartRent’s Series B Preferred Stock, par value $0.00001 per share;

“SmartRent Series B-1 Preferred Stock” are to the shares of SmartRent’s Series B-1 Preferred Stock, par value $0.00001 per share;

“SmartRent Series C Preferred Stock” are to the shares of SmartRent’s Series C Preferred Stock, par value $0.00001 per share;

“SmartRent Series C-1 Preferred Stock” are to the shares of SmartRent’s Series C-1 Preferred Stock, par value $0.00001 per share;

“SmartRent Series Seed Preferred Stock” are to the shares of SmartRent’s Series Seed Preferred Stock, par value $0.00001 per share;

“SmartRent stockholders” are to the stockholders of SmartRent prior to the closing of the Business Combination;

“Sponsor” are to Fifth Wall Acquisition Sponsor, LLC, a Delaware limited liability company, which is FWAA’s sponsor; and

 

ii

 

“Trust Account” are to the trust account established by FWAA for the benefit of its stockholders with Continental Stock Transfer & Trust Company.

Unless specified otherwise, amounts in this proxy statement/prospectus are presented in U.S. dollars.

Defined terms in the financial statements contained in this proxy statement/prospectus have the meanings ascribed to them in the financial statements.

This document is neither an offer to sell nor a solicitation of an offer to buy any security in any Fifth Wall Fund, and may not be used or relied upon in connection with any offer or solicitation. A private offering of interests in a Fifth Wall Fund may only be made by such Fifth Wall Fund pursuant to the offering documents for such Fifth Wall Fund, which will contain additional information about the investment objectives, terms, and conditions of an investment in such Fifth Wall Fund and also contain tax information and risk disclosures that are important to any investment decision regarding such Fifth Wall Fund. The information contained in this material is superseded by, and is qualified in its entirety by reference to, such offering documents. This communication is intended only for persons resident in jurisdictions where the distribution or availability of this communication would not be contrary to applicable laws or regulations.

 

iii

 

TRADEMARKS, TRADE NAMES AND SERVICE MARKS

FWAA, SmartRent and SmartRent’s subsidiaries own or have rights to trademarks, trade names and service marks that they use in connection with the operation of their business. In addition, their names, logos and website names and addresses are their trademarks or service marks. Other trademarks, trade names and service marks appearing in this proxy statement/prospectus are the property of their respective owners. Solely for convenience, in some cases, the trademarks, trade names and service marks referred to in this proxy statement/prospectus are listed without the applicable ®, M and SM symbols, but their respective owners will assert, to the fullest extent under applicable law, their rights to these trademarks, trade names and service marks.

 

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QUESTIONS AND ANSWERS

The questions and answers below highlight only selected information from this proxy statement/prospectus and only briefly address some commonly asked questions about the Business Combination, the Special Meeting, and the proposals to be presented at the Special Meeting. The following questions and answers do not include all the information that is important to FWAA stockholders. You are urged to read this entire proxy statement/​prospectus carefully, including the Annexes and the other documents referred to herein, to fully understand the Business Combination and the voting procedures for the Special Meeting.

QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION

Q:

WHAT IS THE BUSINESS COMBINATION?

​

A:

FWAA, Merger Sub, and SmartRent have entered into the Merger Agreement, pursuant to which Merger Sub will merge with and into SmartRent, with SmartRent surviving the Business Combination as a wholly owned subsidiary of FWAA. In connection with the Closing of the Business Combination, SmartRent will be renamed SmartRent Technologies, Inc. and FWAA will be renamed SmartRent, Inc.

​

FWAA will hold the Special Meeting to, among other things, obtain the approvals required for the Business Combination and the other transactions contemplated by the Merger Agreement, and you are receiving this proxy statement/prospectus in connection with such meeting. See “The Merger Agreement” beginning on page 191. In addition, a copy of the Merger Agreement is attached to this proxy statement/prospectus as Annex A. We urge you to read this proxy statement/prospectus carefully, including the Annexes and the other documents referred to herein, in their entirety.

Q:

WHY AM I RECEIVING THIS DOCUMENT?

​

A:

FWAA is sending this proxy statement/prospectus to its stockholders to help them decide how to vote their shares of FWAA common stock with respect to the matters to be considered at the Special Meeting. The Business Combination cannot be completed unless FWAA’s stockholders approve the Business Combination Proposal, the Charter Proposal, and the Nasdaq Proposal set forth in this proxy statement/​prospectus for their approval. Information about the Special Meeting, the Business Combination and the other business to be considered by stockholders at the Special Meeting is contained in this proxy statement/prospectus. This document constitutes a proxy statement of FWAA and a prospectus of FWAA. It is a proxy statement because the FWAA Board is soliciting proxies using this proxy statement/​prospectus from its stockholders. It is a prospectus because FWAA, in connection with the Business Combination, is offering shares of FWAA Class A common stock in exchange for the outstanding shares of SmartRent common stock, pursuant to the Business Combination. See “The Merger Agreement — Merger Consideration” and “The Subscription Agreements.”

​

Q:

WHAT WILL SMARTRENT STOCKHOLDERS RECEIVE IN THE BUSINESS COMBINATION?

​

A:

As part of the Business Combination, SmartRent equityholders (including holders of warrants, options and RSUs) will receive aggregate merger consideration of 157,678,300 newly issued shares of FWAA Class A common stock. Assuming a value of $10.00 per FWAA Class A share, which is the price at which FWAA completed its initial public offering in February 2021, the aggregate merger consideration implies an aggregate equity value for SmartRent of approximately $1.58 billion.

​

Under the terms of the Merger Agreement, immediately prior to the effective time of the Business Combination (the “Effective Time”), SmartRent will cause each share of SmartRent preferred stock issued and outstanding to be automatically converted into a number of shares of SmartRent common stock in accordance with SmartRent’s charter (the “preferred stock conversion”).

At the Effective Time:

•

Common Stock:   Each share of SmartRent common stock issued and outstanding immediately prior to the Closing of the Business Combination (including shares of SmartRent common stock issued in the preferred stock conversion prior to the Closing, but excluding shares owned by SmartRent or any direct or indirect wholly owned subsidiary of SmartRent as treasury stock or shares owned

​

 

v

 

by FWAA) will be cancelled and converted into the right to receive a number of shares of FWAA Class A common stock equal to the Exchange Ratio;

•

Warrants:   Each outstanding warrant to purchase SmartRent common stock, whether or not exercisable, will be converted into a warrant to purchase a number of shares of FWAA Class A common stock equal to the product of (x) the number of shares of SmartRent common stock underlying such SmartRent warrant immediately prior to the Closing and (y) the Exchange Ratio;

​

•

RSUs:   Each outstanding unvested SmartRent RSU will be converted into an RSU representing the right to receive a number of shares of FWAA Class A common stock equal to the product of (x) the number of shares of SmartRent common stock underlying such SmartRent RSU immediately prior to the Closing and (y) the Exchange Ratio; and

​

•

Options:   Each outstanding SmartRent stock option, whether vested or unvested, will be converted into an option to purchase a number of shares of FWAA Class A common stock equal to the product of (x) the number of shares of SmartRent common stock underlying such SmartRent stock option immediately prior to the Closing and (y) the Exchange Ratio, at an exercise price per share equal to (A) the exercise price per share of SmartRent common stock underlying such SmartRent stock option immediately prior to the Closing divided by (B) the Exchange Ratio.

​

The “Exchange Ratio” is the quotient of (x) the aggregate merger consideration of 157,678,300 shares of FWAA Class A common stock, divided by (y) the number of shares of SmartRent common stock and SmartRent preferred stock outstanding immediately prior to the Effective Time, expressed on a fully diluted and as-converted basis to SmartRent’s common stock using the treasury method of accounting, and including, without duplication, (i) the number of shares of SmartRent’s common stock issued or issuable in the preferred stock conversion, and the exercise of warrants (assuming that all warrants have been exercised), (ii) the aggregate number of shares issuable upon the exercise of all SmartRent options, whether vested or unvested, outstanding immediately prior to the Effective Time in accordance with their respective terms and (iii) the aggregate number of shares of common stock underlying SmartRent RSUs. Based on the number of shares of SmartRent capital stock outstanding and issuable upon the net exercise of all outstanding SmartRent warrants, RSUs, and stock options, in each case as of May 10, 2021, the estimated Exchange Ratio is approximately 4.8846.

The total percentage of shares of FWAA Class A common stock expected to be held by holders of SmartRent capital stock on a fully diluted basis upon the closing of the Business Combination is approximately 72.5%, assuming no FWAA public stockholder exercises redemption rights in connection with completion of 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 Special Meeting, which is set for [•], 2021; however, such meeting could be adjourned, as described herein. Neither FWAA nor SmartRent can assure you of when or if the Business Combination will be completed and it is possible that factors outside of the control of both companies could result in the Business Combination being completed at a different time or not at all. Prior to the Closing of the Business Combination, FWAA must obtain the approval of its stockholders for certain of the proposals set forth in this proxy statement/prospectus for their approval, SmartRent must obtain the written consent of its stockholders for the Business Combination, and FWAA and SmartRent must obtain certain necessary regulatory approvals and satisfy other closing conditions. See “The Merger Agreement — Conditions to the Business Combination” beginning on page 204.

​

Q:

WHAT HAPPENS IF THE BUSINESS COMBINATION IS NOT COMPLETED?

​

A:

If the Business Combination is not completed, SmartRent stockholders will not receive any consideration for their shares of SmartRent capital stock, and SmartRent preferred stock will not be converted into SmartRent common stock. Instead, SmartRent will remain an independent company. See “The Merger Agreement — Termination” and “Risk Factors” beginning on page 205 and page 24, respectively.

​

 

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Q:

HOW WILL FWAA BE MANAGED AND GOVERNED FOLLOWING THE BUSINESS COMBINATION?

​

A:

FWAA does not currently have any management-level employees other than Brendan Wallace, our Chairman and Chief Executive Officer and Andriy Mykhaylovskyy, our Chief Financial Officer and Director. Following the Closing, the Post-Combination Company’s executive officers are expected to be the current management team of SmartRent. See “Management of the Post-Combination Company Following the Business Combination” for more information.

​

FWAA is, and after the Closing will continue to be, managed by its board of directors. Following the Closing, the Board will consist of the following seven members: Lucas Haldemen, [•], [•], [•], [•], [•] and [•]. In addition, following the Closing, we expect that a majority of the directors will be “independent” under applicable Nasdaq listing rules. See the section entitled “Management of the Post-Combination Company Following the Business Combination” for more information.

Q:

WILL FWAA OBTAIN NEW FINANCING IN CONNECTION WITH THE BUSINESS COMBINATION?

​

A:

In connection with the execution of the Merger Agreement, FWAA entered into subscription agreements (collectively, the “Subscription Agreements”) with certain parties subscribing for shares of FWAA Class A common stock (the “Subscribers”), pursuant to which the Subscribers have agreed to purchase, and FWAA has agreed to sell to the Subscribers, an aggregate of 15,500,000 shares of FWAA Class A common stock, for a purchase price of $10.00 per share and at an aggregate purchase price of $155.0 million. The obligations to complete the transactions contemplated by the Subscription Agreements are conditioned upon, among other things, customary closing conditions and the consummation of the transactions contemplated by the Merger Agreement, including the Business Combination. See “Other Agreements — Subscription Agreements.”

​

If the 15,500,000 shares of FWAA Class A common stock to be issued to the Subscribers simultaneously with the consummation of the Business Combination were currently outstanding, such shares would have an aggregate market value of $168,950,000.00 based upon the closing price of $10.90 per share of Class A common stock on the Nasdaq on May 10, 2021, the most recent practicable date prior to the date of this proxy statement/prospectus.

Q:

WHAT EQUITY STAKE WILL CURRENT FWAA PUBLIC STOCKHOLDERS, THE FWAA SPONSOR AND FWAA’S INDEPENDENT DIRECTORS, THE SUBSCRIBERS AND THE SMARTRENT STOCKHOLDERS HOLD IN FWAA FOLLOWING THE CLOSING?

​

A:

The expected beneficial ownership of shares of the Post-Combination Company’s common stock, assuming no Public Shares of FWAA are redeemed will be as follows:

​

•

the public stockholders will own 34,500,000 shares of common stock, representing approximately 15.9% of the total shares outstanding;

​

•

the Sponsor and FWAA’s independent directors will own 9,672,500 shares of common stock, representing approximately 4.5% of the total shares outstanding;

​

•

the Subscribers will own 15,500,000 shares of common stock, representing approximately 7.1% of the total shares outstanding; and

​

•

the SmartRent stockholders will own 157,678,300 shares of common stock on a fully diluted net exercise basis, representing approximately 72.5% of the total shares outstanding.

​

The expected beneficial ownership of shares of the Post-Combination Company’s common stock, assuming the maximum level of redemption of the Public Shares at which the Minimum Cash Condition (as defined herein) under the Merger Agreement will be satisfied will be as follows:

•

the public stockholders will own 9,500,000 shares of common stock, representing approximately 4.9% of the total shares outstanding;

​

•

the Sponsor and FWAA’s independent directors will own 9,672,500 shares of common stock, representing approximately 5.0% of the total shares outstanding;

​

 

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•

the Subscribers will own 15,500,000 shares of common stock, representing approximately 8.1% of the total shares outstanding; and

​

•

the SmartRent stockholders will own 157,678,300 shares of common stock on a fully diluted net exercise basis, representing approximately 82.0% of the total shares outstanding.

​

For more information, see “Unaudited Pro Forma Condensed Combined Financial Information.”

Q:

FOLLOWING THE BUSINESS COMBINATION, WILL FWAA’S COMMON STOCK CONTINUE TO TRADE ON A STOCK EXCHANGE?

​

A:

Yes. In connection with the Closing, we intend to apply to continue the listing of our Class A common stock on the Nasdaq and to list the shares of Class A common stock to be issued in connection with the Business Combination. Following the Closing, we intend to change our name from “Fifth Wall Acquisition Corp. I” to “SmartRent, Inc.,” and our Class A common stock is expected to continue to be listed on the Nasdaq under the symbol “SMRT.”

​

QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING

Q:

WHEN AND WHERE IS THE SPECIAL MEETING?

​

A:

The Special Meeting will be held at [•] a.m. Eastern Time, on [•], 2021, in virtual format. FWAA stockholders may attend, vote and examine the list of FWAA stockholders entitled to vote at the Special Meeting by visiting and entering the control number found on their proxy card, voting instruction form or notice included in their proxy materials. In light of public health concerns regarding the COVID-19 pandemic, the Special Meeting will be held in virtual meeting format only. You will not be able to attend the Special Meeting physically.

​

Q:

WHAT AM I BEING ASKED TO VOTE ON AND WHY IS THIS APPROVAL NECESSARY?

​

A:

The FWAA stockholders are being asked to vote on the following:

​

•

A proposal to adopt the Merger Agreement and the transactions contemplated thereby. See the section entitled “Proposal No. 1 — The Business Combination Proposal.”

​

•

A proposal to adopt the Proposed Charter in the form attached hereto as Annex B. See the section entitled “Proposal No. 2 — The Charter Proposal.”

​

•

A proposal with respect to certain governance provisions in the Proposed Charter, which are being separately presented in accordance with SEC requirements and which will be voted upon on a non-binding advisory basis. See the section entitled “Proposal No. 3 — The Governance Proposal.”

​

•

A proposal to elect seven directors to serve on the Board until the 2022 annual meeting of stockholders, in the case of Class I directors, the 2023 annual meeting of stockholders, in the case of Class II directors, and the 2024 annual meeting of stockholders, in the case of Class III directors, and, in each case, until their respective successors are duly elected and qualified. See the section entitled “Proposal No. 4 — The Director Election Proposal.”

​

•

A proposal to approve, for purposes of complying with applicable listing rules of Nasdaq: (i) the issuance of shares of FWAA Class A common stock to the SmartRent stockholders pursuant to the Merger Agreement; (ii) the issuance of shares of FWAA Class A common stock pursuant to the Subscription Agreements; and (iii) the issuance of shares of FWAA Class A common stock pursuant to the conversion of FWAA Class B common stock. See the section entitled “Proposal No. 5 — The Nasdaq Proposal.”

​

•

A proposal to approve and adopt the SmartRent, Inc. 2021 Equity Incentive Plan (the “Equity Incentive Plan”). See the section entitled “Proposal No. 6 — The Equity Incentive Plan Proposal.”

​

•

A proposal to approve and adopt the SmartRent, Inc. 2021 Employee Stock Purchase Plan (the “ESPP”). See the section entitled “Proposal No. 7 — The Employee Stock Purchase Plan Proposal.”

​

•

A proposal to approve the adjournment of 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

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otherwise in connection with, the approval of the Business Combination Proposal, the Charter Proposal, the Director Election Proposal, the Nasdaq Proposal, the Equity Incentive Plan Proposal or the Employee Stock Purchase Plan Proposal. See the section entitled “Proposal No. 8 — The Adjournment Proposal.”

FWAA will hold the Special Meeting 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 this proxy statement/prospectus carefully, including the Annexes and the other documents referred to herein.

Consummation of the Business Combination is conditioned on the approval of each of the Business Combination Proposal, the Charter Proposal and the Nasdaq Proposal, subject to the terms of the Merger Agreement. If the Business Combination Proposal is not approved, the other Proposals, except the Adjournment Proposal, will not be presented to stockholders for a vote.

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

Q:

WHO IS SMARTRENT?

​

SmartRent is an enterprise software company that provides a fully integrated, brand-agnostic smart home operating system to residential property owners and operators, as well as homebuilders, home buyers, developers and residents. SmartRent’s operating system is designed to enable owners and operators to streamline property management and operations, lower operating costs, increase revenues, protect their assets through improved visibility and control over their properties and communities, and provide an elevated living experience for residents. SmartRent is a privately held Delaware corporation. The mailing address of SmartRent’s principal executive office is 18835 N. Thompson Peak Parkway, Suite 300, Scottsdale, Arizona 85255 and the telephone number of SmartRent’s principal executive office is (844) 479-1555.

Q:

WHY IS FWAA PROPOSING THE BUSINESS COMBINATION?

​

A:

FWAA 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 February 9, 2021, FWAA completed its initial public offering of Class A common stock at a price of $10.00 per share, raising total gross proceeds of $345.0 million. Simultaneously with the consummation of the FWAA IPO, FWAA completed a private placement of shares of Class A common stock to its Sponsor, raising total gross proceeds of $10.475 million. Since the FWAA IPO, FWAA’s activity has been limited to the evaluation of business combination candidates.

Based on its due diligence investigations of SmartRent and the industry in which it operates, including the financial and other information provided by SmartRent in the course of their negotiations in connection with the Merger Agreement, the FWAA Board believes that the Business Combination with SmartRent is advisable and in the best interests of FWAA and its stockholders. See the section entitled “The Business Combination — Recommendation of the FWAA Board of Directors and Reasons for the Business Combination.”

Q:

WHY IS FWAA PROVIDING STOCKHOLDERS WITH THE OPPORTUNITY TO VOTE ON THE BUSINESS COMBINATION?

​

A:

We are seeking approval of the Business Combination for purposes of complying with our Existing Charter and applicable Nasdaq listing rules requiring stockholder approval of issuances of more than 20% of a listed company’s issued and outstanding common stock. In addition, pursuant to the Existing Charter, we must provide all public stockholders with the opportunity to redeem all or a portion of their Public Shares upon the consummation of an initial business combination (as defined in our Existing Charter), either in conjunction with a tender offer or in conjunction with a stockholder vote to approve such initial business combination. If we submit an initial business combination to the

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stockholders for their approval, our Existing Charter requires us to conduct a redemption offer in conjunction with the proxy solicitation (and not in conjunction with a tender offer) pursuant to the applicable SEC proxy solicitation rules.

Q:

DO SMARTRENT’S STOCKHOLDERS NEED TO APPROVE THE BUSINESS COMBINATION?

​

A:

Yes. Concurrently with the execution of the Merger Agreement, FWAA and the Supporting SmartRent Stockholders (as defined herein) entered into the Support Agreement (as defined herein), a copy of which is attached as Annex E. Under the Support Agreement, each Supporting SmartRent Stockholder agreed to, among other things, (i) vote at any meeting of the stockholders of SmartRent or by written consent all of its SmartRent common stock and/or SmartRent preferred stock, as applicable, held of record or thereafter acquired in favor of the Business Combination and the adoption of the Merger Agreement; and (ii) be bound by certain transfer restrictions with respect to SmartRent securities, in each case, on the terms and subject to the conditions set forth in the Support Agreement. The shares of SmartRent capital stock that are owned by the Supporting SmartRent Stockholders and subject to the Support Agreement represent approximately 57.1% of the outstanding shares of SmartRent common stock and approximately 78.3% of the outstanding shares of SmartRent preferred stock, in each case, as of April 21, 2021. The execution and delivery of written consents by all of the Supporting SmartRent Stockholders will constitute the SmartRent stockholder approval at the time of such delivery.

​

Q:

DO I HAVE REDEMPTION RIGHTS?

​

A:

If you are a holder of Public Shares, you have the right to demand that FWAA redeem such shares for a pro rata portion of the cash held in the Trust Account, which holds the proceeds of the FWAA IPO, as of two business days prior to the consummation of the transactions contemplated by the Business Combination Proposal (including interest earned on the funds held in the Trust Account and not previously released to FWAA to pay taxes) upon the Closing (“Redemption Rights”).

​

Notwithstanding the foregoing, a holder of Public Shares, 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 without the consent of FWAA. Accordingly, all Public Shares in excess of 15% held by a public stockholder, together with any affiliate of such stockholder or any other person with whom such holder is acting in concert or as a “group,” will not be redeemed without the consent of FWAA.

Under FWAA’s Existing Charter, the Business Combination may be consummated only if FWAA has at least $5,000,001 of net tangible assets after giving effect to all redemption requests from holders of Public Shares that properly demand redemption of their shares for cash.

Q:

WILL MY VOTE AFFECT MY ABILITY TO EXERCISE REDEMPTION RIGHTS?

​

A:

No. You may exercise your redemption rights whether you vote your Public Shares for or against, or whether you abstain from voting on, the Business Combination Proposal or any other Proposal described in this proxy statement/prospectus. As a result, the Business Combination Proposal can be approved by stockholders who will redeem their Public Shares and no longer remain stockholders and 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:

HOW DO I EXERCISE MY REDEMPTION RIGHTS?

​

A:

If you are a holder of Public Shares and wish to exercise your redemption rights, you must demand that FWAA redeem your shares for cash no later than the second business day preceding the vote on the Business Combination Proposal by delivering your stock to FWAA’s transfer agent physically or electronically using Depository Trust Company’s DWAC (Deposit and Withdrawal at Custodian) system. Any holder of Public Shares 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 $[•], or $[•] per share, as of [•], 2021, the FWAA Record Date). Such amount, including

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interest earned on the funds held in the Trust Account and not previously released to FWAA to pay its taxes, will be paid promptly upon consummation of the Business Combination. However, under Delaware law, the proceeds held in the Trust Account could be subject to claims that could take priority over those of FWAA’s public stockholders exercising redemption rights, regardless of whether such holders vote for or against the Business Combination Proposal. 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.

Any request for redemption, once made by a holder of Public Shares, 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 FWAA’s transfer agent and later decide prior to the Special Meeting not to elect redemption, you may request that FWAA’s transfer agent return the shares (physically or electronically).

If a holder of Public Shares properly makes a request for redemption and the Public Shares are delivered to FWAA’s transfer agent as described herein, then, if the Business Combination is consummated, FWAA 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 Public Shares for cash and you will cease to have any rights as a FWAA stockholder (other than the right to receive the redemption amount) upon consummation of the Business Combination.

For a discussion of the material U.S. federal income tax considerations for holders of Public Shares with respect to the exercise of these redemption rights, see “Material U.S. Federal Income Tax Considerations — Material Tax Considerations with respect to a Redemption of Public Shares” beginning on page 212.

Q:

DO I HAVE APPRAISAL RIGHTS IF I OBJECT TO THE PROPOSED BUSINESS COMBINATION?

​

A:

No. The FWAA stockholders do not have appraisal rights in connection with the Business Combination under the DGCL. See the section entitled “FWAA’s Special Meeting of Stockholders — Appraisal Rights.”

​

Q:

WHAT HAPPENS TO THE FUNDS DEPOSITED IN THE TRUST ACCOUNT AFTER CONSUMMATION OF THE BUSINESS COMBINATION?

​

A:

A total of $345.0 million in net proceeds of the FWAA IPO and a portion of the proceeds of the concurrent sale of the Private Placement Shares was placed in the Trust Account following the FWAA IPO. After consummation of the Business Combination, the funds in the Trust Account will be used to pay holders of the Public Shares who exercise redemption rights, to pay fees and expenses incurred in connection with the Business Combination (including aggregate fees of up to $12,075,000 as deferred underwriting commissions) and for the Post-Combination Company’s working capital and general corporate purposes.

​

Q:

WHAT HAPPENS IF THE BUSINESS COMBINATION IS NOT CONSUMMATED?

​

A:

If FWAA does not complete the Business Combination with SmartRent for whatever reason, FWAA would search for another target business with which to complete a business combination. If FWAA does not complete the Business Combination with SmartRent or another target business within 24 months after the closing of the FWAA IPO (the “Completion Window”), FWAA 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 on the funds held in the Trust Account and not previously released to FWAA to pay taxes (less up to $100,000 of interest to pay dissolution expenses) divided by the number of outstanding Public Shares. The Sponsor and FWAA’s independent directors have no redemption rights in the event a business combination is not effected in the Completion Window, and, accordingly, their Founder Shares will have no value. Additionally, in the event a business combination is not effected in the Completion Window, the proceeds of the sale of the Private Placement Shares held

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in the Trust Account will be used to fund the redemption of the outstanding Public Shares, and the Private Placement Shares will have no value.

Q:

HOW DO THE FWAA SPONSOR AND INDEPENDENT DIRECTORS INTEND TO VOTE ON THE PROPOSALS?

​

A:

The Sponsor and FWAA’s independent directors are entitled to vote an aggregate of 21.9% of the outstanding shares of FWAA common stock (which includes the Founder Shares and the Private Placement Shares). FWAA has entered into a letter agreement with the Sponsor and FWAA’s independent directors, pursuant to which each agreed to vote all shares of FWAA common stock owned by them in favor of the Business Combination Proposal presented at the Special Meeting.

​

Q:

WHAT CONSTITUTES A QUORUM AT THE SPECIAL MEETING?

​

A:

A majority of the voting power of the shares of stock entitled to vote at the Special Meeting must be present, in person (including presence at a virtual meeting) or represented by proxy at the Special Meeting to constitute a quorum and in order to conduct business at the Special Meeting. Abstentions and broker non-votes will be counted as present for the purpose of determining a quorum. The Sponsor and FWAA’s independent directors, who currently own 21.9% of the issued and outstanding shares of FWAA common stock, will count towards this quorum. In the absence of a quorum, the chairman of the Special Meeting has power to adjourn the Special Meeting. As of the FWAA Record Date for the Special Meeting, 22,086,250 shares of FWAA common stock would be required to be present in person (including presence at a virtual meeting) or represented by proxy to achieve a quorum.

​

Q:

WHAT VOTE IS REQUIRED TO APPROVE EACH PROPOSAL AT THE SPECIAL MEETING?

​

A:

The Business Combination Proposal:   The approval of the Business Combination Proposal requires the affirmative vote of the holders of a majority of the shares of Class A common stock and Class B common stock that are voted at the Special Meeting, voting as a single class. Accordingly, a stockholder’s failure to submit a proxy or to vote in person (including presence at a virtual meeting) at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to the Business Combination Proposal, will have no effect on the Business Combination Proposal. FWAA stockholders must approve the Business Combination Proposal in order for the Business Combination to occur.

​

The Charter Proposal:   The approval of the Charter Proposal requires the affirmative vote of (i) the holders of a majority of the outstanding shares of Class B common stock, voting separately as a single class; and (ii) a majority of the outstanding shares of Class A common stock and Class B common stock, voting as a single class, in each case present in person (including presence at a virtual meeting) or represented by proxy. Accordingly, a stockholder’s failure to submit a proxy or to vote in person (including presence at a virtual meeting) at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to the Charter Proposal, will have the same effect as a vote “AGAINST” such proposal. The Business Combination is conditioned on the approval of the Charter Proposal, subject to the terms of the Merger Agreement. If the Business Combination Proposal is not approved, the Charter Proposal will not be presented to the stockholders for a vote.

The Governance Proposal:   The approval of the Governance Proposal requires the affirmative vote of a majority of the votes cast by the holders of Class A common stock and Class B common stock, present in person (including presence at a virtual meeting) or represented by proxy, voting as a single class. Accordingly, a stockholder’s failure to submit a proxy or to vote in person (including presence at a virtual meeting) at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to the Governance Proposal, will have no effect on the Governance Proposal. The Business Combination is not conditioned on the approval of the Governance Proposal. If the Business Combination Proposal is not approved, the Governance Proposal will not be presented to the stockholders for a vote.

The Director Election Proposal:   The approval of the Director Election proposal requires the affirmative vote of a plurality of the votes cast by the holders of Class A common stock and Class B common stock, present in person (including presence at a virtual meeting) or represented by proxy, voting as a single class. This means that the director nominees who receive the most affirmative votes will be elected.

 

xii

 

Stockholders may not cumulate their votes with respect to the election of directors. Accordingly, a stockholder’s failure to submit a proxy or to vote in person (including presence at a virtual meeting) at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to the Director Election Proposal, will have no effect on the election of directors. The Business Combination is not conditioned on the approval of the Director Election Proposal. If the Business Combination Proposal is not approved, the Director Election Proposal will not be presented to the stockholders for a vote.

The Nasdaq Proposal:   The approval of the Nasdaq Proposal requires the affirmative vote of a majority of the votes cast by the holders of Class A common stock and Class B common stock, present in person (including presence at a virtual meeting) or represented by proxy, voting as a single class. Accordingly, a stockholder’s failure to submit a proxy or to vote in person (including presence at a virtual meeting) at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to the Nasdaq Proposal, will have no effect on the Nasdaq Proposal. The Business Combination is conditioned on the approval of the Nasdaq Proposal, subject to the terms of the Merger Agreement. If the Business Combination Proposal is not approved, the Nasdaq Proposal will not be presented to the stockholders for a vote.

The Equity Incentive Plan Proposal:   The approval of the Equity Incentive Plan Proposal requires the affirmative vote of a majority of the votes cast by the holders of Class A common stock and Class B common stock, present in person (including presence at a virtual meeting) or represented by proxy, voting as a single class. Accordingly, a stockholder’s failure to submit a proxy or to vote in person (including presence at a virtual meeting) at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to the Equity Incentive Plan Proposal, will have no effect on the Equity Incentive Plan Proposal. The Business Combination is not conditioned on the approval of the Equity Incentive Plan Proposal. If the Business Combination Proposal is not approved, the Equity Incentive Plan Proposal will not be presented to the stockholders for a vote.

The Employee Stock Purchase Plan Proposal:   The approval of the Employee Stock Purchase Plan Proposal requires the affirmative vote of a majority of the votes cast by the holders of Class A common stock and Class B common stock, present in person (including presence at a virtual meeting) or represented by proxy, voting as a single class. Accordingly, a stockholder’s failure to submit a proxy or to vote in person (including presence at a virtual meeting) at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to the Employee Stock Purchase Plan Proposal, will have no effect on the Employee Stock Purchase Plan Proposal. The Business Combination is not conditioned on the approval of the Employee Stock Purchase Plan Proposal. If the Business Combination Proposal is not approved, the Employee Stock Purchase Plan Proposal will not be presented to the stockholders for a vote.

The Adjournment Proposal:   The affirmative vote of a majority of the votes cast by the holders of Class A common stock and Class B common stock, present in person (including presence at a virtual meeting) or represented by proxy, voting as a single class, is required to approve the Adjournment Proposal. Accordingly, a stockholder’s failure to submit a proxy or to vote in person (including presence at a virtual meeting) at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to the Adjournment Proposal, will have no effect on the Adjournment Proposal. The Business Combination is not conditioned on the approval of the Adjournment Proposal.

FWAA has entered into a letter agreement with the Sponsor and FWAA’s independent directors, pursuant to which each agreed to vote all shares of FWAA common stock owned by them in favor of the Business Combination Proposal presented at the Special Meeting.

Q:

WHAT DO I NEED TO DO NOW?

​

A:

FWAA urges you to read carefully and consider the information contained in this proxy statement/​prospectus, including the Annexes and the other documents referred to herein, and to consider how the Business Combination will affect you as a stockholder of FWAA. 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.

​

 

xiii

 

Q:

WHAT HAPPENS IF I SELL MY SHARES OF CLASS A COMMON STOCK BEFORE THE SPECIAL MEETING?

​

A:

The FWAA 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 FWAA Class A common stock after the FWAA 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 FWAA Class A common stock because you will no longer be able to tender them prior to the Special Meeting in accordance with the provisions described herein. If you transferred your shares of FWAA Class A common stock prior to the FWAA Record Date, you 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:

HOW DO I VOTE?

​

A:

If you are a holder of record of FWAA common stock on the FWAA Record Date, you may vote in person (including presence at a virtual meeting) at the Special Meeting 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. You may also vote by telephone or Internet by following the instructions printed on the proxy card.

​

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, bank, or other nominee 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 in person (including presence at a virtual meeting), obtain a proxy from your broker, bank, or nominee.

Q:

IF MY SHARES ARE HELD IN “STREET NAME” BY A BROKER, BANK, OR OTHER NOMINEE, WILL MY BROKER, BANK, OR OTHER NOMINEE VOTE MY SHARES FOR ME?

​

A:

If your shares are held in “street name” in a stock brokerage account or by a broker, bank, or other nominee, you must provide the record holder of your shares with instructions on how to vote your shares. Please follow the voting instructions provided by your broker, bank, or other nominee. Please note that you may not vote shares held in “street name” by returning a proxy card directly to FWAA or by voting in person (including presence at a virtual meeting) at the Special Meeting unless you provide a “legal proxy,” which you must obtain from your broker, bank, or other nominee.

​

Under the rules of Nasdaq, brokers who hold shares in “street name” for a beneficial owner of those shares typically have the authority to vote in their discretion on “routine” proposals when they have not received instructions from beneficial owners. However, brokers are not permitted to exercise their voting discretion with respect to the approval of matters that Nasdaq determines to be “non-routine” without specific instructions from the beneficial owner. It is expected that all proposals to be voted on at the Special Meeting are “non-routine” matters. Broker non-votes occur when a broker or nominee is not instructed by the beneficial owner of shares to vote on a particular proposal for which the broker does not have discretionary voting power.

If you are a FWAA stockholder holding your shares in “street name” and you do not instruct your broker, bank, or other nominee on how to vote your shares, your broker, bank, or other nominee will not vote your shares on the Business Combination Proposal, the Charter Proposal, the Governance Proposal, the Director Election Proposal, the Nasdaq Proposal, the Equity Incentive Plan Proposal, the Employee Stock Purchase Plan Proposal or the Adjournment Proposal. Such broker non-votes will be the equivalent of a vote “AGAINST” the Charter Proposal, but will have no effect on the vote count for such other proposals.

Q:

WHAT IF I ATTEND THE SPECIAL MEETING AND ABSTAIN OR DO NOT VOTE?

​

A:

For purposes of the Special Meeting, an abstention occurs when a stockholder attends the meeting in person (including presence at a virtual meeting) and does not vote or returns a proxy with an “abstain” vote.

​

 

xiv

 

If you are a FWAA stockholder that attends the Special Meeting virtually and fails to vote on the Charter Proposal, your failure to vote will have the same effect as a vote “AGAINST” such proposal.

If you are a FWAA stockholder that attends the Special Meeting virtually and fails to vote on the Business Combination Proposal, the Governance Proposal, the Director Election Proposal, the Nasdaq Proposal, the Equity Incentive Plan Proposal, the Employee Stock Purchase Plan Proposal and the Adjournment Proposal, your failure to vote will have no effect on the Business Combination Proposal, the Governance Proposal, the Director Election Proposal, the Nasdaq Proposal, the Equity Incentive Plan Proposal, the Employee Stock Purchase Plan Proposal or the Adjournment Proposal.

Q:

WHAT WILL HAPPEN IF I RETURN MY PROXY CARD WITHOUT INDICATING HOW TO VOTE?

​

A:

If you are a holder of record of FWAA common stock on the FWAA Record Date and you sign and return your proxy card without indicating how to vote on any particular Proposal, the common stock represented by your proxy will be voted “FOR” each of the Proposals presented at the Special Meeting.

​

Q:

MAY I CHANGE MY VOTE AFTER I HAVE MAILED MY SIGNED PROXY CARD?

​

A:

Yes. If you are a holder of record of FWAA common stock on the FWAA Record Date, you may change your vote at any time before your proxy is exercised by doing any one of the following:

​

•

send another proxy card with a later date;

​

•

notify FWAA’s Secretary in writing before the Special Meeting that you have revoked your proxy; or

​

•

attend the Special Meeting and vote electronically by visiting and entering the control number found on your proxy card, instruction form or notice you previously received.

​

If you are a stockholder of record of FWAA and you choose to send a written notice or to mail a new proxy, you must submit your notice of revocation or your new proxy to [•], and it must be received at any time before the vote is taken at the Special Meeting. Any proxy that you submitted may also be revoked by submitting a new proxy by mail, or online or by telephone, not later than [•] on [•], or by voting online at the Special Meeting. Simply attending the Special Meeting will not revoke your proxy. If you have instructed a broker, bank, or other nominee to vote your shares of FWAA common stock, you must follow the directions you receive from your broker, bank, or other nominee in order to change or revoke your vote.

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 and consummated, you will become a stockholder of the Post-Combination Company. Failure to take any action with respect to the Special Meeting will not affect your ability to exercise your redemption rights. If you fail to take any action with respect to the Special Meeting and the Business Combination is not approved, you will continue to be a stockholder of FWAA while FWAA searches for another target business with which to complete a business combination.

​

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 FWAA shares.

​

 

xv

 

Q:

WHO CAN HELP ANSWER MY QUESTIONS?

​

A:

If you have questions about the Business Combination or if you need additional copies of the proxy statement/prospectus or the enclosed proxy card you should contact our proxy solicitor, Innisfree M&A Incorporated:

​

Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, NY 10022
Stockholders may call toll free: (877) 456-3402
Banks and Brokers may call collect: (212) 750-5833

If you are a holder of Public Shares and you intend to seek redemption of your Public Shares, you will need to deliver your stock (either physically or electronically) to FWAA’s transfer agent at the address below prior to the vote at the Special Meeting. 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

 

xvi

 

1

 

2

 

3

 

​

4

 

5

 

6

 

​

7

 

​

8

 

9

 

10

 

11

 

​

12

 

​

13

 

14

 

​	​	​	December 31, 2020				​
Balance Sheet Data:	​	​	​	​	​	​	​
Working capital	​	​	​	$	(135,509)	​	​
Total assets	​	​	​	$	153,990	​	​
Total liabilities	​	​	​	$	135,509	​	​
Stockholder’s equity	​	​	​	$	18,481	​	​

15

 

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

2020

​

​

2019

​

Revenue

​

​

​

​

​

​

​

​

​

​

​

​

​

Hardware

​

​

​

$

31,978

​

​

​

​

$

24,017

​

​

Professional services

​

​

​

​

12,304

​

​

​

​

​

9,095

​

​

Hosted services

​

​

​

​

8,252

​

​

​

​

​

3,120

​

​

Total revenue

​

​

​

​

52,534

​

​

​

​

​

36,232

​

​

Cost of Revenue

​

​

​

​

​

​

​

​

​

​

​

​

​

Hardware

​

​

​

​

35,255

​

​

​

​

​

20,462

​

​

Professional services

​

​

​

​

16,176

​

​

​

​

​

14,438

​

​

Hosted services

​

​

​

​

5,430

​

​

​

​

​

2,380

​

​

Total cost of revenue

​

​

​

​

56,831

​

​

​

​

​

37,280

​

​

Operating expense

​

​

​

​

​

​

​

​

​

​

​

​

​

Research and development

​

​

​

​

9,406

​

​

​

​

​

7,731

​

​

Sales and marketing

​

​

​

​

5,429

​

​

​

​

​

3,261

​

​

General and administrative

​

​

​

​

16,584

​

​

​

​

​

17,794

​

​

Total operating expense

​

​

​

​

31,419

​

​

​

​

​

28,786

​

​

Loss from operations

​

​

​

​

(35,716)

​

​

​

​

​

(29,834)

​

​

Other Expense

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest expense

​

​

​

​

559

​

​

​

​

​

159

​

​

Other expense

​

​

​

​

685

​

​

​

​

​

265

​

​

Loss before income taxes

​

​

​

​

(36,960)

​

​

​

​

​

(30,261)

​

​

Provision for income taxes

​

​

​

​

149

​

​

​

​

​

—

​

​

Net loss

​

​

​

$

(37,109)

​

​

​

​

$

(30,261)

​

​

Basic and diluted net loss per share

​

​

​

$

(21.08)

​

​

​

​

$

(38.60)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

2020

​

​

2019

​

Cash and cash equivalents

​

​

​

$

38,618

​

​

​

​

$

21,424

​

​

Working capital

​

​

​

​

54,826

​

​

​

​

​

18,892

​

​

Total assets

​

​

​

​

103,849

​

​

​

​

​

47,455

​

​

Total liabilities

​

​

​

​

70,667

​

​

​

​

​

45,678

​

​

Convertible preferred stock

​

​

​

​

99,972

​

​

​

​

​

34,746

​

​

Total stockholders’ deficit

​

​

​

​

(66,790)

​

​

​

​

​

(32,969)

​

​

16

 

​

17

 

​

​

​

SmartRent

​

​

FWAA (As adjusted)

​

​

Pro Forma Combined (Assuming No Redemptions)

​

​

Pro Forma Combined (Assuming Maximum Redemptions)

​

Statement of Operations Data – Year ended December 31, 2020

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

(in thousands)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Revenue

​

​

​

$

52,534

​

​

​

​

$

—

​

​

​

​

$

52,534

​

​

​

​

$

52,534

​

​

Cost of revenue

​

​

​

​

56,831

​

​

​

​

​

—

​

​

​

​

​

56,831

​

​

​

​

​

56,831

​

​

Operating expenses

​

​

​

​

31,419

​

​

​

​

​

7

​

​

​

​

​

35,947

​

​

​

​

​

35,947

​

​

Operating loss

​

​

​

​

(35,716)

​

​

​

​

​

(7)

​

​

​

​

​

(40,244)

​

​

​

​

​

(40,244)

​

​

Net loss

​

​

​

​

(37,109)

​

​

​

​

​

(7)

​

​

​

​

​

(41,637)

​

​

​

​

​

(41,637)

​

​

Balance Sheet Data – As of December 31, 2020

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

(in thousands)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total current assets

​

​

​

$

87,655

​

​

​

​

$

3,477

​

​

​

​

$

544,480

​

​

​

​

$

294,480

​

​

Total assets

​

​

​

​

103,849

​

​

​

​

​

348,477

​

​

​

​

​

560,674

​

​

​

​

​

310,674

​

​

Total current liabilities

​

​

​

​

32,829

​

​

​

​

​

712

​

​

​

​

​

33,541

​

​

​

​

​

33,541

​

​

Total liabilities

​

​

​

​

70,667

​

​

​

​

​

12,787

​

​

​

​

​

71,379

​

​

​

​

​

71,379

​

​

Convertible preferred stock

​

​

​

​

99,972

​

​

​

​

​

—

​

​

​

​

​

—

​

​

​

​

​

—

​

​

Common stock subject to redemption

​

​

​

​

—

​

​

​

​

​

330,668

​

​

​

​

​

—

​

​

​

​

​

—

​

​

Total stockholders’ (deficit) equity

​

​

​

​

(66,790)

​

​

​

​

​

5,021

​

​

​

​

​

489,295

​

​

​

​

​

239,295

​

​

18

 

​

​

​

Historical

​

​

Pro Forma Combined

​

​

SmartRent Equivalent Pro Forma Combined

​

​

SmartRent

​

​

FWAA

​

​

(Assuming No Redemptions)

​

​

(Assuming Maximum Redemptions)

​

​

(Assuming No Redemptions)

​

​

(Assuming Maximum Redemptions)

​

Year Ended December 31, 2020

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Basic and Diluted net (loss) income per share, Class A(1)

​

​

​

​

​

​

​

​

​

$

0.00

​

​

​

​

$

(0.22)

​

​

​

​

$

(0.25)

​

​

​

​

$

(0.31)

​

​

​

​

$

(0.31)

​

​

Basic and Diluted net (loss) income per share, Class B(1)

​

​

​

​

​

​

​

​

​

$

0.00

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Basic and Diluted net (loss) income per share, Smart Rent(1)

​

​

​

$

(21.08)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Book value per share – basic and diluted(2)

​

​

​

$

(37.95)

​

​

​

​

$

0.11

​

​

​

​

$

2.53

​

​

​

​

$

1.42

​

​

​

​

$

3.67

​

​

​

​

$

1.79

​

​

Weighted average shares outstanding used in computing net loss per share, basic and diluted, Class A

​

​

​

​

​

​

​

​

​

​

35,547,500

​

​

​

​

​

193,147,202(3)

​

​

​

​

​

168,147,202(3)

​

​

​

​

​

133,474,702(3)

​

​

​

​

​

133,474,702(3)

​

​

Weighted average shares outstanding used to computing net loss per share, basic and diluted, Class B

​

​

​

​

​

​

​

​

​

​

8,625,000

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Weighted average shares outstanding of SmartRent common stock per share, basic and diluted

​

​

​

​

1,760,000

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

19

 

​

20

 

21

 

​

22

 

23

 

RISK FACTORS

In addition to the other information contained in this proxy statement/prospectus, including the matters addressed under the heading “Forward-Looking Statements,” you should carefully consider the following risk factors in deciding how to vote on the proposals presented in this proxy statement/prospectus.

Risks Related to SmartRent’s Business and Industry

In this section “we,”“us,” and “our” refer to SmartRent prior to the Business Combination and to the Post-Combination Company following the Business Combination.

We are an early-stage company with a history of losses. We have not been profitable historically and may not achieve or maintain profitability in the future.

We experienced net losses in each year since inception, including a net loss of $30.3 million for 2019 and $37.1 million for 2020. We believe we will continue to incur operating losses and negative cash flow in the near-term as we continue to invest significantly in our business. We expect to continue to devote significant resources into our future growth, including making meaningful investments in our customer acquisition teams, building out our technological capabilities, expanding internationally, and exploring strategic acquisition opportunities. In addition, as a public company, we will incur significant accounting, legal, and other expenses.

We expect to continue to incur losses and will have to generate and sustain increased revenues to achieve future profitability. Achieving profitability will require us to increase revenues, manage our cost structure, and avoid significant liabilities. Revenue growth may slow, revenues may decline, or we may incur significant losses in the future for a number of possible reasons, including general macroeconomic conditions, increasing competition (including competitive pricing pressures), a decrease in the growth of the markets in which we compete, our failure to capitalize on growth opportunities. Additionally, we may encounter unforeseen operating expenses, difficulties, complications, delays, and quality problems, and other unknown factors that may result in losses in future periods. If these losses exceed our expectations or our revenue growth expectations are not met in future periods, our financial performance will be harmed and our stock price could decline.

Our operating results and financial condition may fluctuate from period to period.

Our operating results and financial condition fluctuate from quarter-to-quarter and year-to-year and are likely to continue to vary due to a number of factors, many of which will not be within our control. Both our business and the smart building technology industry are evolving rapidly, and our historical operating results may not be useful in predicting our future operating results. If our operating results do not meet the guidance that we provide to the market or the expectations of securities analysts or investors, our stock price will likely decline. Fluctuations in our operating results and financial condition may arise due to a number of factors, including:

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the proportion of our revenue attributable to software-as-a-service (“SaaS”), versus hardware and other sales;

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fluctuations in demand for our platform and solutions;

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changes in pricing by us in response to competitive pricing actions;

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the ability of our hardware vendors to continue to manufacture high-quality products and to supply sufficient products to meet our demands;

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the timing and success of introductions of new solutions, products or upgrades by us or our competitors;

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changes in our business and pricing policies or those of our competitors;

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the ability to accurately forecast revenue;

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our ability to control costs, including our operating expenses and the costs of the hardware we purchase;

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•

competition, including entry into the industry by new competitors and new offerings by existing competitors;

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our ability to successfully manage any future acquisitions and integrations of businesses;

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issues related to introductions of new or improved products, such as shortages of prior generation products or short-term decreased demand for next generation products;

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the amount and timing of expenditures, including those related to expanding our operations, increasing research and development, introducing new solutions or paying litigation expenses;

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the ability to effectively manage growth within existing and new markets domestically and internationally;

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changes in the payment terms for our platform and solutions;

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the strength of regional, national and global economies; and

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the impact of other events or factors, including those resulting from natural disasters, pandemics, war, acts of terrorism or responses to these events.

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Due to the foregoing factors, and the other risks discussed in this proxy statement/prospectus, you should not rely on quarter-over-quarter and year-over-year comparisons of our operating results as an indicator of our future performance.

If the smart home technology industry does not grow as we expect, or if we cannot expand our products and solutions to meet the demands of this market, our revenue may decline, fail to grow or fail to grow at an accelerated rate, and we may incur operating losses.

The market for smart home solutions is in an early stage of development, and it is uncertain how rapidly or how consistently this market will develop and the degree to which our products and solutions will be accepted into the single-family and multifamily rental markets in which we operate. Some residents, owners, or operators may be reluctant or unwilling to use our solutions for a number of reasons, including satisfaction with traditional solutions, concerns about additional costs, concerns about data privacy, and lack of awareness of the benefits of our solutions. Our ability to expand the sales of our products and solutions into new markets depends on several factors, including the reputation and recognition of our products and solutions, the timely completion, introduction and market acceptance of our products and solutions, the ability to attract, retain and effectively train sales and marketing personnel, the effectiveness of our marketing programs, the costs of our products and solutions and the success of our competitors. If we are unsuccessful in developing and marketing our products and solutions into new markets, or if customers do not perceive or value the benefits of our products and solutions, the market for our products and solutions might not continue to develop or might develop more slowly than we expect, either of which would harm our revenue and growth prospects.

Our limited operating history, recent growth and the quickly changing markets in which we operate make evaluating our current business and future prospects difficult, which may increase the risk of investing in our stock.

We have experienced rapid growth since our formation in 2016. We have encountered and expect to continue to encounter risks and uncertainties frequently experienced by growing companies in rapidly changing markets. If our assumptions regarding these uncertainties are incorrect or change in reaction to changes in our markets, or if we do not manage or address these risks successfully, our results of operations could differ materially from our expectations, and our business could suffer.

Our growth has placed and may continue to place significant demands on our management, and our operational and financial infrastructure. As our operations grow in size, scope, and complexity, we will need to increase our sales and marketing efforts and add additional sales and marketing personnel and senior management in various regions worldwide and improve and upgrade our systems and infrastructure to attract, service, and retain an increasing number of customers. For example, we plan to explore opportunities for international expansion and extend our offerings to current customers by introducing new software,

 

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services, and products. The expansion of our systems and infrastructure will require us to commit substantial financial, operational, and technical resources in advance of an increase in the volume of business, with no assurance that the volume of business will increase. Any such capital investments will increase our cost base.

We collect, store, process, and use personal information of our customers and their residents, which subjects us to legal obligations and laws and regulations related to security and privacy, and any actual or perceived failure to meet those obligations could harm our business.

We collect, process, store, and use a wide variety of data from current and prospective customers and their residents, including personal information, such as home addresses and geolocation. Federal, state, and international laws and regulations governing privacy, data protection, and e-commerce transactions require us to safeguard our customers’ personal information. The scope of such laws and regulations is rapidly changing. We are also subject to the terms of our privacy policies and contractual obligations to third parties related to privacy, data protection and information security. We strive to comply with applicable laws, regulations, policies and other legal obligations relating to privacy, data protection, and information security. However, the regulatory framework for privacy, data protection, and information security is, and is likely to remain, uncertain for the foreseeable future, and it is possible that these or other actual or alleged obligations may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or our practices.

We also expect that there will continue to be new laws, regulations and industry standards concerning privacy, data protection, and information security proposed and enacted in various jurisdictions. Various states throughout the United States are increasingly adopting or revising privacy, information security, and data protection laws and regulations that could have a significant impact on our current and planned privacy, data protection, and information security-related practices, our collection, use, sharing, retention, and safeguarding of customer, consumer, resident, employee, or any other third-party information we receive, and some of our current or planned business activities. For example, California enacted the California Consumer Privacy Act of 2018 (“CCPA”), that affords consumers who are California residents expanded privacy protections and control over the collection, use and sharing of their personal information. The CCPA went into effect on January 1, 2020 and gives California residents expanded rights to access and require deletion of their personal information, opt out of certain personal information sharing and receive detailed information about how their personal information is used. The CCPA also provides for a private right of action for data breaches that may increase data breach litigation. Relatedly, the California Privacy Rights Act (the “CPRA”) was recently adopted by California voters. The CPRA significantly amends the CCPA and imposes additional data protection obligations on covered companies doing business in California, including additional consumer rights processes and opt outs for certain uses of sensitive data. It also creates a new California data protection agency specifically tasked to enforce the law, which would likely result in increased regulatory scrutiny of California businesses in the areas of data protection and security. The substantive requirements for businesses subject to the CPRA will go into effect on January 1, 2023 and become enforceable on July 1, 2023.

Additionally, the interpretations of existing federal and state consumer protection laws relating to online collection, use, dissemination, and security of personal information adopted by the Federal Trade Commission (the “FTC”), state attorneys general, private plaintiffs, and courts have evolved, and may continue to evolve, over time. Consumer protection laws require us to publish statements that describe how we handle personal information and choices individuals may have about the way we handle their personal information. If such information that we publish is considered untrue, we may be subject to government claims of unfair or deceptive trade practices, which could lead to significant liabilities and consequences. Furthermore, according to the FTC, violating consumers’ privacy rights or failing to take appropriate steps to keep consumers’ personal information secure may constitute unfair acts or practices in or affecting commerce, thus violating Section 5(a) of the Federal Trade Commission Act of 1914 (the “FTC Act”). The FTC expects a company’s data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities.

With data privacy and security laws and regulations imposing new and relatively burdensome obligations, and with substantial uncertainty over the interpretation and application of these and other laws

 

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and regulations, we may face challenges in addressing their requirements and making necessary changes to our policies and practices, and may incur significant costs and expenses in an effort to do so. Any failure or perceived failure by us to comply with our privacy policies, our data privacy or security related obligations to our customers or any of our other legal obligations relating to data privacy or security may result in governmental investigations or enforcement actions, litigation, claims or public statements against us by consumer advocacy groups or others, and could result in significant liability, loss of relationships with key third parties, or cause our customers to lose trust in us, which could have an adverse effect on our reputation and business.

Furthermore, we may be required to disclose personal data pursuant to demands from individuals, privacy advocates, regulators, government agencies, and law enforcement agencies in various jurisdictions with conflicting privacy and security laws. This disclosure or refusal to disclose personal data may result in a breach of privacy and data protection policies, notices, laws, rules, court orders, and regulations and could result in proceedings or actions against us in the same or other jurisdictions, damage to our reputation and brand, and inability to provide our products and services to customers in certain jurisdictions. Additionally, changes in the laws and regulations that govern our collection, use, and disclosure of customer data could impose additional requirements with respect to the retention and security of customer data, could limit our marketing activities, and have an adverse effect on our business, financial condition, and operating results.

If our security controls are breached, or if unauthorized or inadvertent access to customer or residential information or other data or to control or view systems is otherwise obtained, our products and solutions may be perceived as insecure, our business may be harmed, and we may incur significant liabilities.

Use of our solutions involves the storage, transmission and processing of personal, payment, credit and other confidential and private information of our customers and their residents, and may in certain cases permit access to our customers’ vacant and rented property or help secure them. We also maintain and process confidential and proprietary information in our business, including our employees’ and contractors’ personal information and confidential business information. We rely on proprietary and commercially available systems, software, tools and monitoring to protect against unauthorized use or access of the information we process and maintain. Our solutions and the networks and information systems we utilize in our business are at risk for breaches as a result of third-party action, employee or partner error, malfeasance, or other factors. In addition, due to the COVID-19 pandemic, we have enabled substantially all of our employees to work remotely which may make us more vulnerable to cyber-attacks and may create operational or other challenges, any of which could harm our systems or our business. Although we have taken precautionary measures to prepare for these threats and challenges, there is no guarantee that our precautions will fully protect our systems.

Although we have established security procedures to protect customers and their resident information, our or our partners’ security and testing measures may not prevent security breaches. Further, advances in computer capabilities, new discoveries in the field of cryptography, inadequate facility security, or other developments may result in a compromise or breach of the technology we use to protect customer data. Any compromise of our security or breach of our customers’ or their residents’ privacy could harm our reputation or financial condition and, therefore, our business. Criminals and other nefarious actors are using increasingly sophisticated methods, including cyber-attacks, phishing, social engineering and other illicit acts to capture, access, or alter various types of information, to engage in illegal activities such as fraud and identity theft, and to expose and exploit potential security and privacy vulnerabilities in corporate systems and websites. Unauthorized intrusion into the portions of our systems and networks and data storage devices that process and store customer and resident confidential and private information, the loss of such information or the deployment of malware or other harmful code to our services or our networks or systems may result in negative consequences, including the actual or alleged malfunction of our products, software or services. In addition, third parties, including our third-party affiliates, could also be sources of security risks to us in the event of a failure of their own security systems and infrastructure. The threats we and our third-party affiliates face continue to evolve and are difficult to predict due to advances in computer capabilities, new discoveries in the field of cryptography and new and sophisticated methods used by criminals. There can be no assurances that our defensive measures will prevent cyber-attacks or that we will discover network or system intrusions or other breaches on a timely basis or at all. We cannot be certain that we will not suffer a compromise or breach of the technology protecting the systems or networks that house or

 

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access our software, services and products or on which we or our partners process or store personal information or other sensitive information or data, or that any such incident will not be believed or reported to have occurred. Any such actual or perceived compromises or breaches to systems, or unauthorized access to our customers’ data, products, software or services, or acquisition or loss of data, whether suffered by us, our partners or other third parties, whether as a result of employee error or malfeasance or otherwise, could harm our business. They could, for example, cause interruptions in operations, loss of data, loss of confidence in our products and solutions and damage to our reputation, and could limit the adoption of our products and solutions. They could also subject us to costs, regulatory investigations and orders, litigation, contract damages, indemnity demands, and other liabilities and materially and adversely affect our customer base, sales, revenues, and profits. Any of these could, in turn, have a material adverse impact on our business, financial condition, cash flows, or results of operations. If such an event results in unauthorized access to or loss of any data subject to data privacy and security laws and regulations, then we could be subject to substantial fines by U.S. federal and state authorities, foreign data privacy authorities around the world and private claims by companies or individuals. A cyber-attack may cause additional costs, such as investigative and remediation costs, and the costs of providing individuals and/or data owners with notice of the breach, legal fees, and the costs of any additional fraud detection activities required by law, a court, or a third party. Depending on the nature of the information compromised, in the event of a data breach or other unauthorized access to our customer data, we may also have obligations to notify customers about the incident and we may need to provide some form of remedy to such customers or their residents, such as a subscription to a credit monitoring service for the individuals affected by the incident. A growing number of legislative and regulatory bodies have adopted consumer notification requirements in the event of unauthorized access to or acquisition of certain types of personal data. Such breach notification laws continue to evolve and may be inconsistent from one jurisdiction to another. Complying with these obligations could cause us to incur substantial costs and could increase negative publicity surrounding any incident that compromises customer data. Additionally, some of our customer contracts require us to indemnify customers from damages they may incur as a result of a breach of our systems. There can be no assurance that the limitation of liability provisions in our contracts for a security breach would be enforceable or would otherwise protect us from any such liabilities or damages with respect to any particular claim. Further, if a high profile security breach occurs with respect to another provider of smart home solutions, our customers and potential customers or their residents may lose trust in the security of our products and solutions or in the smart home technology industry generally, which could adversely impact our ability to retain existing customers or attract new ones. Even in the absence of any security breach, customer concerns about security, privacy or data protection may deter them from using our products and solutions.

Our insurance policies covering errors and omissions and certain security and privacy damages and claim expenses may not be sufficient to compensate for all potential liability. Although we maintain cyber liability insurance, we cannot be certain that our coverage will be adequate for liabilities actually incurred or that insurance will continue to be available to us on economically reasonable terms, or at all.

We may be unable to attract new customers and maintain customer satisfaction, which could have an adverse effect on our business and growth.

We have experienced significant customer growth over the past several years. Our continued business and revenue growth are dependent on our ability to continuously attract and retain customers, and we cannot be sure that we will be successful in these efforts, or that customer retention levels will not materially decline. There are a number of factors that could lead to a decline in customer levels or that could prevent us from increasing our customer levels, including:

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our failure to introduce new features, software, products, or solutions that customers find engaging or our introduction of new products or solutions, or changes to existing products and solutions that are not favorably received;

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harm to our brand and reputation;

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pricing and perceived value of our offerings;

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our inability to deliver quality products and solutions in a timely manner;

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our customers engaging with competitive software, services, products, and solutions;

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•

technical or other problems preventing customers or their residents from using our products and solutions in a rapid and reliable manner or otherwise affecting the customer experience;

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deterioration of the apartment or real estate industry, including declining levels of multifamily and single-family rental buildings and reduced spending in the apartment industry;

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unsatisfactory experiences with the delivery, installation, or products or solutions; and

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deteriorating general economic conditions or a change in consumer spending preferences or buying trends.

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Additionally, further expansion into international markets such as Canada and the United Kingdom will create new challenges in attracting and retaining customers that we may not successfully address. As a result of these factors, we cannot be sure that our customer levels will be adequate to maintain or permit the expansion of our operations. A decline in customer levels could have an adverse effect on our business, financial condition, and operating results.

Potential customer turnover in the future, or costs we incur to retain and upsell our customers, could materially and adversely affect our financial performance.

Our customers have no obligation to renew their contracts for our software services after the expiration of the initial term, which on average is five to six years. In the event that these customers do renew their contracts, they may choose to renew for fewer units, shorter contract lengths, or for less expensive subscriptions. We cannot predict the renewal rates for customers that have entered into software contracts with us.

Customer turnover, as well as reductions in the number of units for which a customer subscribes, each could have a significant impact on our results of operations, as does the cost we incur in our efforts to retain our customers and encourage them to upgrade their services and increase the number of their units that use our software, services, and products. Our turnover rate could increase in the future if customers are not satisfied with our products and solutions, the value proposition of our solutions or our ability to otherwise meet their needs and expectations. Turnover and reductions in the number of units may also increase due to factors beyond our control, including the failure or unwillingness of customers to pay for our products and solutions due to financial constraints and the impact of a slowing economy. If a significant number of customers terminate, reduce, or fail to renew their contracts we may be required to incur significantly higher marketing expenditures than we currently anticipate in order to increase the number of new customers or to upsell existing customers, and such additional marketing expenditures could harm our business and results of operations.

Our future success also depends in part on our ability to sell additional functionalities to our current customers and to sell into our customers’ future projects. This may require increasingly sophisticated and more costly sales efforts, technologies, tools and a longer sales cycle. Any increase in the costs necessary to upgrade, expand and retain existing customers could materially and adversely affect our financial performance. If our efforts to convince customers to add units and, in the future, to purchase additional functionalities are not successful, our business may suffer. In addition, such increased costs could cause us to increase our rates, which could increase our turnover rate.

If we are unable to develop new products and solutions, adapt to technological change, sell our products and solutions into new markets, or further penetrate our existing markets, our revenue may not grow as expected.

Our ability to increase sales will depend, in large part, on our ability to enhance and improve our products and solutions, introduce new products, solutions, software, features, or services and in a timely manner, sell into new markets and further penetrate our existing markets. The success of any enhancement or new product or solution depends on several factors, including the timely completion, introduction and market acceptance of enhanced or new products and solutions, the ability to maintain and develop relationships with partners and vendors, the ability to attract, retain and effectively train sales and marketing personnel, the effectiveness of our marketing programs, and the ability of our products and solutions to maintain compatibility with a wide range of connected devices. Any new product or solution we develop or acquire may not be introduced in a timely or cost-effective manner, and may not achieve the broad market

 

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acceptance necessary to generate significant revenue. Any new markets into which we attempt to sell our products and solutions, including new vertical markets (e.g., commercial office) and new countries or regions, may not be receptive. Our ability to further penetrate our existing markets depends on the quality, availability and reliability of our products and solutions and our ability to design our products and solutions to meet customer demand. Similarly, if any of our potential competitors implement new technologies before we are able to implement ours, those competitors may be able to provide more effective products or solutions, possibly at lower prices. Any delay or failure in the introduction of new or enhanced products or solutions could harm our business, financial condition, cash flows and results of operations.

The markets in which we participate could become more competitive as many companies, including large technology companies and managed service providers, may target the markets in which we do business. If we are unable to compete effectively with these potential competitors and sustain pricing levels for our products and solutions, our sales and profitability could be adversely affected.

The smart home technology industry in which we participate may become more competitive and competition may intensify in the future.

Our ability to compete depends on a number of factors, including:

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our product and solution functionality, performance, ease of use, reliability, availability, and cost effectiveness relative to that of our competitors’ products and solutions;

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our success in utilizing new and proprietary technologies to offer solutions and features previously not available in the marketplace;

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our success in identifying new markets, applications and technologies;

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our ability to attract and retain partners;

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our name recognition and reputation;

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our ability to recruit software engineers and sales and marketing personnel; and

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our ability to protect our intellectual property.

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Customers may prefer to purchase from their existing suppliers rather than a new supplier regardless of product performance or features. In the event a customer decides to evaluate a smart home solution, the customer may be more inclined to select one of our competitors if such competitor’s product offerings are broader or at a better price point than those that we offer.

We face, and may in the future face, competition from large technology providers and managed service providers that may have greater capital and resources than we do. Competitors that are larger in scale and have greater resources may benefit from greater economies of scale and other lower costs that permit them to offer more favorable terms to consumers (including lower service costs) than we offer, causing such consumers to choose to enter into contracts with such competitors. For instance, cable and telecommunications companies are expanding into the smart home and security industries and are bundling their existing offerings with automation and monitored security services. In some instances, it appears that certain components of such bundled offerings are significantly underpriced and, in effect, subsidized by the rates charged for the other product or services offered by these companies. These bundled pricing alternatives may influence customers’ desire to use our services at rates and fees we consider appropriate. These competitors may also benefit from greater name recognition and superior advertising, marketing, promotional and other resources. To the extent that such competitors utilize any competitive advantages in markets where our business is more highly concentrated, the negative impact on our business may increase over time. In addition to potentially reducing the number of new customers we are able to originate, increased competition could also result in increased customer acquisition costs and higher attrition rates that would negatively impact us over time. The benefit offered to larger competitors from economies of scale and other lower costs may be magnified by an economic downturn in which customers put a greater emphasis on lower cost products or services. In addition, we face competition from regional competitors that concentrate their capital and other resources in targeting local markets.

 

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Cable and telecommunications companies actively targeting the smart home market and large technology companies expanding into the smart home market could result in pricing pressure, a shift in customer preferences towards the services of these companies and a reduction in our market share. Continued pricing pressure from these competitors or failure to achieve pricing based on the competitive advantages previously identified above could prevent us from maintaining competitive price points for our products and services, resulting in lost subscribers or in our inability to attract new subscribers and have an adverse effect on our business, financial condition, results of operations, and cash flows.

If we are unable to sustain pricing levels for our products and solutions whether due to competitive pressure or otherwise, our gross margins could be significantly reduced. Further, our decisions around the development of new products or solutions are grounded in assumptions about eventual pricing levels. If there is price compression in the market after these decisions are made, it could have a negative effect on our business.

If we fail to continue to develop our brand or our reputation is harmed, our business may suffer.

We believe that continuing to strengthen our current brand will be critical to achieving widespread acceptance of our products and solutions and will require continued focus on active marketing efforts. The demand for and cost of online and traditional advertising have been increasing and may continue to increase. Accordingly, we may need to increase our investment in, and devote greater resources to, advertising, marketing, and other efforts to create and maintain brand loyalty among SmartRent customers. Brand promotion activities may not yield increased revenues, and even if they do, any increased revenues may not offset the expenses incurred in building our brand. In addition, if we do not handle customer or resident complaints effectively, our brand and reputation may suffer, we may lose our customers’ confidence, and they may choose to terminate, reduce or not to renew their contracts. Many of our customers and their residents also participate in social media and online blogs about smart home technology solutions, including our products, and our success depends in part on our ability to minimize negative and generate positive feedback through such online channels where existing and potential customers seek and share information. If we fail to promote and maintain our brand, our business could be materially and adversely affected.

The loss of one or more key members of our management team or personnel, or our failure to attract, integrate and retain additional personnel in the future, could harm our business and negatively affect our ability to successfully grow our business.

We are highly dependent upon the continued service and performance of the key members of our management team and other personnel. The loss of any of these individuals, each of whom is “at will” and may terminate his or her employment relationship with us at any time, could disrupt our operations, harm our reputation and brand, and significantly delay or prevent the achievement of our business objectives. We believe that our future success will also depend in part on our continued ability to identify, hire, train, and motivate qualified personnel. We may be unable to attract and retain suitably qualified individuals who are capable of meeting our growing operational, managerial and other requirements, or we may be required to pay increased compensation in order to do so. Our failure to attract, hire, integrate, and retain qualified personnel could impair our ability to achieve our business objectives.

Our products and solutions may be affected from time to time by design and manufacturing defects that could subject us to personal injury, property damage, product liability, warranty, and other claims, which could adversely affect our business and result in harm to our reputation.

We offer complex solutions involving advanced software and web-based interactive user interfaces and hardware products and services that can be affected by design and manufacturing defects. Sophisticated software, applications, and web-based interactive user interfaces, such as those offered by us, have issues that can unexpectedly interfere with the intended operation of hardware or software products. Defects may also exist in components and products that we source from third parties. Any such defects could cause our products and solutions to create a risk of property damage and personal injury, and subject us to the hazards and uncertainties of product liability claims and related litigation. In addition, from time to time, we may experience outages, service slowdowns, or errors that affect our software, applications, and web-based interactive user interfaces. As a result, our solutions may not perform as anticipated and may not meet

 

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customer expectations. There can be no assurance that we will be able to detect and fix all issues and defects in the hardware, software, and services we offer as part of our products and solutions. Failure to do so could result in widespread technical and performance issues affecting our products and solutions and could lead to claims against us. We maintain general liability insurance; however, design and manufacturing defects, and claims related thereto, may subject us to judgments or settlements that result in damages materially in excess of the limits of our insurance coverage. In addition, we may be exposed to recalls, product replacements or modifications, write-offs of inventory, property, plant and equipment, or intangible assets, and significant warranty and other expenses such as litigation costs and regulatory fines. If we cannot successfully defend any large claim, maintain our general liability insurance on acceptable terms, or maintain adequate coverage against potential claims, our financial results could be adversely impacted. Further, given that our customers deploy our products and solutions to provide a safe and secure living space to their residents, quality problems could subject us to substantial liability, adversely affect the experience for users of our products and solutions and result in harm to our reputation, loss of competitive advantage, poor market acceptance, reduced demand for our products and solutions, delay in new product and solution introductions, and lost revenue.

We depend on a limited number of third-party suppliers and manufacturers and partners for our products. A loss of any of our suppliers, manufacturers, and partners could negatively affect our business.

We rely on a limited number of suppliers to manufacture and transport our products, including in some cases only a single supplier for some of our products and components. Our reliance on a limited number of manufacturers for our products increases our risks, since we do not currently have alternative or replacement manufacturers beyond these key parties. In the event of interruption from any of our manufacturers, we may not be able to increase capacity from other sources or develop alternate or secondary sources without incurring material additional costs and substantial delays. Furthermore, many of these manufacturers’ primary facilities are located in Europe or Asia. Thus, our business could be adversely affected if one or more of our suppliers is impacted by a natural disaster or other interruption at a particular location.

If we experience a significant increase in demand for our products, or if we need to replace an existing supplier or partner, we may be unable to supplement or replace them on terms that are acceptable to us, which may undermine our ability to deliver our products to customers in a timely manner. For example, it may take a significant amount of time to identify a manufacturer that has the capability and resources to build our products to our specifications in sufficient volume. Identifying suitable suppliers, manufacturers, and partners is an extensive process that requires us to become satisfied with their quality control, technical capabilities, responsiveness and service, financial stability, regulatory compliance, and labor and other ethical practices. Accordingly, a loss of any of our significant suppliers, manufactures, or logistics partners could have an adverse effect on our business, financial condition, and operating results.

We have limited control over our suppliers, manufacturers, and partners, which may subject us to significant risks, including the potential inability to produce or obtain quality products and services on a timely basis or in sufficient quantity. If these third-party suppliers, manufacturers, and partners experience any delay, disruption or quality control problems in their operations, including due to COVID-19, we could lose market share and our results of operations may suffer.

We have limited control over our suppliers, manufacturers, and partners. In addition, these suppliers, manufacturers, and partners may experience delay, disruption, or lapse in the quality of their operations, including due to COVID-19 and associated governmental restrictions. The foregoing subjects us to risks, such as the following:

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inability to satisfy demand for our products;

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reduced control over delivery timing and product reliability;

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reduced ability to monitor the manufacturing process and components used in our products;

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limited ability to develop comprehensive manufacturing specifications that take into account any materials shortages or substitutions;

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variance in the manufacturing capability of our third-party manufacturers;

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•

price increases;

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failure of a significant supplier, manufacturer, or partner to perform its obligations to us for technical, market, or other reasons;

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insolvency, bankruptcy or liquidation of a significant supplier, manufacturer, or partner;

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difficulties in establishing additional supplier, manufacturer, or partner relationships if we experience difficulties with our existing suppliers, manufacturers, or partners;

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shortages of materials or components;

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disagreements with suppliers, manufacturers, or logistics partners as to quality control, leading to a surplus of ineffective products;

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misappropriation of our intellectual property;

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exposure to natural catastrophes, political unrest, terrorism, labor disputes, and economic instability resulting in the disruption of trade from foreign countries in which our products are manufactured or the components thereof are sourced;

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changes in local economic conditions in the jurisdictions where our suppliers, manufacturers, and partners are located;

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the imposition of new laws and regulations, including those relating to labor conditions, quality and safety standards, imports, duties, tariffs, taxes, and other charges on imports, as well as trade restrictions and restrictions on currency exchange or the transfer of funds; and

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insufficient warranties and indemnities on components supplied to our manufacturers or performance by our partners.

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The occurrence of any of these risks, especially during periods of peak demand, could cause us to experience a significant disruption in our ability to produce and deliver our products to our customers. For example, there is currently a global semiconductor supply shortage. The semiconductor supply chain is complex, with capacity constraints occurring throughout. We must compete with other industries to satisfy current and near-term requirements for semiconductors, and those allocations are not within our control even though we attempt various mitigating actions. An ongoing shortage of semiconductors or other key components can disrupt our production schedule and have an adverse effect on our business, profitability and results of operations.

Changes in trade policies or additional tariffs could make delivery of supplies more expensive and time consuming, leading to increased expenses and delays in shipments. These potential delays and cost increases could have an adverse effect on our business, financial condition, and operations results.

Our ability to use net operating loss carryforwards may be subject to limitations.

As of December 31, 2020, we had approximately $10.4 million of tax-effected federal net operating loss carryforwards available to reduce future taxable income. Realization of any tax benefit from our carryforwards is dependent on our ability to generate future taxable income and the absence of certain “ownership changes.” An “ownership change,” as defined in the applicable federal income tax rules, could place significant limitations, on an annual basis, on the amount of our future taxable income that may be offset by our carryforwards. Such limitations could effectively eliminate our ability to utilize a substantial portion of our carryforwards. We have not conducted a study to determine whether an “ownership change” has occurred since December 31, 2020 or if (i) the Merger will result in an “ownership change,” ​(ii) we have incurred one or more “ownership changes,” or (iii) the issuance of shares of the Post-Combination Company’s common stock results in an “ownership change.” Other issuances of shares of our common stock which could cause an “ownership change” include the issuance of shares of common stock upon future conversion or exercise of outstanding options and warrants or future common stock offerings. If we have experienced or do experience an ownership change at any time since our formation, use of our net operating loss carryforwards and any other tax attribute carryforwards we may have (e.g., carryforwards of general business credits) would be subject to an annual limitation under Section 382 or 383 of the Internal Revenue Code. Such a limitation would be determined by first multiplying the value of our outstanding shares at

 

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the time of the ownership change by the applicable long-term, tax-exempt rate. The applicable long-term tax-exempt rate for ownership changes occurring during the month of May 2021 is 1.64%. In addition, the Internal Revenue Code regulations allow the annual limitation to be increased by certain adjustments, which, for us, would primarily relate to recognized built-in gains on appreciated assets during the five-year recognition period beginning on the ownership change date.

Interruptions to, or other problems with, our website and interactive user interface, information technology systems, manufacturing processes or other operations could damage our reputation and brand and substantially harm our business and results of operations.

The satisfactory performance, reliability, consistency, security and availability of our website and interactive user interface, information technology systems, manufacturing processes and other operations are critical to our reputation and brand, and to our ability to effectively provide our smart home services to customers and their residents. Any interruptions or other problems that cause our website, interactive user interface or information technology systems to malfunction or be unavailable may damage our reputation and brand, result in lost revenue, cause us to incur significant costs seeking to remedy the problem, and otherwise substantially harm our business and results of operations. A number of factors or events could cause such interruptions or problems, including among others, human and software errors, design faults, challenges associated with upgrades, changes or new facets of our business, power loss, telecommunication failures, fire, flood, extreme weather, political instability, acts of terrorism, war, break-ins and security breaches, contract disputes, labor strikes and other workforce-related issues, and other similar events. These risks are augmented by the fact that our customers and their residents use our products and solutions to operate their lights, locks, and other aspects of their living spaces. We are dependent upon our facilities in which we house all of the computer hardware necessary to operate our websites and systems as well as managerial, customer service, sales, marketing and other similar functions, and we have not identified alternatives to these facilities or established fully redundant systems in multiple locations. In addition, we are dependent in part on third parties for the implementation and maintenance of certain aspects of our communications and production systems, and therefore preventing, identifying, and rectifying problems with these aspects of our systems is to a large extent outside of our control.

Moreover, the business interruption insurance that we carry may not be sufficient to compensate us for the potentially significant losses, including the potential harm to the future growth of our business that may result from interruptions in our product lines as a result of system failures.

If we are unable to accurately forecast customer demand for our products and solutions and adequately manage our inventory, our operating results could be adversely affected.

To ensure adequate inventory supply, we must forecast inventory needs and expenses and place orders sufficiently in advance with our suppliers and contract manufacturers, based on our estimates of future demand for particular products. Failure to accurately forecast our needs may result in manufacturing delays or increased costs. Our ability to accurately forecast demand could be affected by many factors, including changes in customer demand for our products and solutions, changes in demand for the software, services, products, or solutions of our competitors, unanticipated changes in general market conditions, and the weakening of economic conditions or customer confidence in future economic conditions, such as those caused by the current COVID-19 outbreak. This risk is likely to be exacerbated by the fact that we may not carry a significant amount of inventory and may not be able to satisfy short-term demand increases. If we fail to accurately forecast customer demand, we may experience excess inventory levels or a shortage of products available for sale.

Inventory levels in excess of customer demand may result in inventory write-downs or write-offs and the sale of excess inventory at discounted prices, which would cause our gross margins to suffer and could impair the strength of our brand. Further, lower than forecasted demand could also result in excess manufacturing capacity or reduced manufacturing efficiencies, which could result in lower margins. Conversely, if we underestimate customer demand, we or our suppliers and manufacturers may not be able to deliver products to meet our requirements or we may be subject to higher costs in order to secure the necessary production capacity. An inability to meet customer demand and delays in the delivery of our products to our customers could result in reputational harm and damaged customer relationships and have an adverse effect on our business, financial condition, and operating results.

 

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The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain senior management and qualified board members.

As a public company, we will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act of 2002, (the “Sarbanes-Oxley Act”), the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of the securities exchange on which our common stock will be traded, and other applicable securities rules and regulations. Compliance with these rules and regulations will increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources, particularly after we are no longer an “emerging growth company.” The Exchange Act requires, among other things, that we file annual, quarterly, and current reports with respect to our business and results of operations. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. In order to maintain and, if required, improve our disclosure controls and procedures and internal control over financial reporting to meet this standard, significant resources and management oversight may be required. As a result, management’s attention may be diverted from other business concerns, which could harm our business and results of operations. Although we have already hired additional employees to comply with these requirements, we may need to hire more employees in the future or engage outside consultants, which will increase our costs and expenses.

In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time-consuming. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities. Our failure to comply with these laws, regulations and standards could materially and adversely affect our business and results of operations.

However, for as long as the Post-Combination Company remains an “emerging growth company” as defined in the JOBS Act, the Post-Combination Company will 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, exemption from the requirement 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 non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We will take advantage of these reporting exemptions until we are no longer an “emerging growth company.”

We will cease to be an “emerging growth company” upon the earliest of (i) the first fiscal year following the fifth anniversary of the FWAA IPO, (ii) the first fiscal year after the Post-Combination Company’s annual gross revenues are $1.07 billion or more, (iii) the date on which the Post-Combination Company has, during the previous three-year period, issued more than $1.0 billion in non-convertible debt securities or (iv) as of the end of any fiscal year in which the market value of the Post-Combination Company’s common stock held by non-affiliates exceeded $700.0 million as of the end of the second quarter of that fiscal year.

We also expect that being a public company and these new rules and regulations will make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee and compensation committee, and qualified executive officers.

As a result of disclosure of information in this proxy statement/prospectus and in filings required of a public company, our business and financial condition will become more visible, which we believe may result in more litigation, including by competitors and other third parties. If such claims are successful, our business and results of operations could be materially and adversely affected, even if the claims do not

 

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result in litigation or are resolved in our favor. These claims, and the time and resources necessary to resolve them, could divert the resources of our management and materially and adversely affect our business and results of operations.

If we fail to maintain an effective system of internal controls, we may not be able to accurately report financial results or prevent fraud and the trading price of our stock could be negatively affected. We have identified material weaknesses in our internal control over financial reporting.

We are not currently required to comply with the rules of the SEC implementing Section 404 of the Sarbanes-Oxley Act and, therefore, we are not required to make a formal assessment of the effectiveness of our internal control over financial reporting for that purpose. Upon becoming a public company, we will be required to comply with the SEC’s rules implementing Sections 302 and 404 of the Sarbanes-Oxley Act, which require management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of controls over financial reporting.

Effective internal controls are necessary to provide reliable financial reports and to assist in the effective prevention of fraud. Any inability to provide reliable financial reports or prevent fraud could harm our business. Any system of internal controls, however well designed and operated, is based in part on certain assumptions and can provide only reasonable, not absolute, assurances that the objectives of the system are met. For instance, we identified material weaknesses in our internal control over financial reporting related to accounting for non-routine transactions, the lack of consistent review of journal entries prior to their posting to the general ledger, and the need to provide formal controls over our information technology. In regard to our accounting for non-routine transactions, we disclosed errors in the accounting for our acquisition of Zenith Highpoint, Inc. (“Zenith”) and its wholly owned subsidiary, Zipato, Ltd. (“Zipato”) in February 2020. In regard to the lack of consistent review over journal entries, we found instances during 2020 in which journal entries were recorded in our general ledger without having been reviewed by a knowledgeable individual other than the preparer before the entries were posted. In regard to establishing formal controls over our information technology, we observed the need to improve access controls and establish segregation of duties for those with roles and responsibilities for the general ledger. While we are implementing measures designed to remediate these material weaknesses, including enhancing our control process for identifying and reviewing non-routine transactions, consistent independent review of journal entries and providing formal controls over information technology, the material weaknesses will not be considered remediated until the applicable controls operate for a sufficient period of time and we conclude, through testing, that these controls are operating effectively.

If we fail to remediate these material weaknesses, determine that our internal controls over financial reporting are not effective, discover areas that need improvement in the future or discover additional material weaknesses, these shortcomings could have an adverse effect on our business and financial results, and the price of our common stock could be negatively affected. 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 our annual or interim financial statements will not be prevented or detected on a timely basis. Accordingly, a material weakness increases the risk that the financial information we report contains material errors.

If we cannot conclude that we have effective internal control over our financial reporting, investors could lose confidence in the reliability of our financial statements, which could lead to a decline in our stock price. Failure to comply with reporting requirements could also subject us to sanctions and/or investigations by the SEC, our stock exchange or other regulatory authorities. If we fail to remedy any deficiencies or maintain the adequacy of our internal controls, we could be subject to regulatory scrutiny, civil or criminal penalties or shareholder litigation. In addition, failure to maintain adequate internal controls could result in financial statements that do not accurately reflect our operating results or financial condition.

We may expand through acquisitions of, or investments in, other companies, each of which may divert our management’s attention, result in additional dilution to our stockholders, increase expenses, disrupt our operations and harm our results of operations.

Our business strategy may, from time to time, include acquiring or investing in complementary services, technologies or businesses. We cannot assure you that we will successfully identify suitable acquisition

 

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candidates, integrate or manage disparate technologies, lines of business, personnel and corporate cultures, realize our business strategy or the expected return on our investment, or manage a geographically dispersed company. Any such acquisition or investment could materially and adversely affect our results of operations. Acquisitions and other strategic investments involve significant risks and uncertainties, including:

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the potential failure to achieve the expected benefits of the combination or acquisition;

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unanticipated costs and liabilities;

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difficulties in integrating new products, solutions, software, features, services, businesses, operations and technology infrastructure in an efficient and effective manner;

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difficulties in maintaining customer relations;

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the potential loss of key employees of the acquired businesses;

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the diversion of the attention of our senior management from the operation of our daily business;

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the potential adverse effect on our cash position to the extent that we use cash for the purchase price;

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the potential significant increase of our interest expense, leverage, and debt service requirements if we incur additional debt to pay for an acquisition;

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the potential issuance of securities that would dilute our stockholders’ percentage ownership;

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the potential to incur large and immediate write-offs and restructuring and other related expenses; and

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the inability to maintain uniform standards, controls, policies and procedures.

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Any acquisition or investment could expose us to unknown liabilities. Moreover, we cannot assure you that we will realize the anticipated benefits of any acquisition or investment. In addition, our inability to successfully operate and integrate newly acquired businesses appropriately, effectively, and in a timely manner could impair our ability to take advantage of future growth opportunities and other advances in technology, as well as on our revenues, gross margins and expenses.

If we are unable to achieve or maintain profitability in the future, we may require additional capital to pursue our business objectives and to respond to business opportunities, challenges, or unforeseen circumstances. If capital is not available to us, our business, results of operations, and financial condition may be adversely affected.

We intend to continue to make expenditures and investments to support the growth of our business and if we are unable to achieve or maintain profitability, we may require additional capital to pursue our business objectives and respond to business opportunities, challenges, or unforeseen circumstances, including the need to develop new products or software or enhance our existing products and software, enhance our operating infrastructure, and acquire complementary businesses and technologies. Accordingly, we may need to engage in equity or debt financings to secure additional funds. However, additional funds may not be available when we need them on terms that are acceptable to us, or at all.

Any debt 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. In addition, the restrictive covenants in credit facilities we may secure in the future may restrict us from being able to conduct our operations in a manner required for our business and may restrict our growth, which could have an adverse effect on our business, financial condition, or results of operations.

We cannot assure you that we will be able to comply with any such restrictive covenants. In the event that we are unable to comply with these covenants in the future, we would seek an amendment or waiver of the covenants. We cannot assure you that any such waiver or amendment would be granted. In such an event, we may be required to repay any or all of our existing borrowings, and we cannot assure you that we will be able to borrow under our existing credit agreements, or obtain alternative funding arrangements on commercially reasonable terms, or at all.

In addition, volatility in the credit markets may have an adverse effect on our ability to obtain debt financing. Any future issuances of equity or convertible debt securities could result in significant dilution to

 

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our existing stockholders, and any new equity securities we issue could have rights, preferences, and privileges superior to those of holders of our common stock. If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, 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, results of operations, financial condition, and prospects could be materially and adversely affected.

Failure to adequately protect our intellectual property, technology, and confidential information could reduce our competitiveness and harm our business and operating results.

Our intellectual property, including our trademarks, copyrights, trade secrets and other proprietary rights, constitutes a significant part of our value. Our success depends, in part, on our ability to protect our proprietary technology, brands and other intellectual property against dilution, infringement, misappropriation and competitive pressure by defending our intellectual property rights. To protect our intellectual property rights, we rely on a combination of trademark, copyright and trade secret laws of the United States and a combination of confidentiality procedures, contractual provisions and other methods, all of which offer only limited protection.

If we fail to adequately protect or assert our intellectual property rights, competitors may dilute our brands or manufacture and market similar products, solutions, software, services, or convert our customers, which could adversely affect our market share and results of operations. Our competitors may challenge, invalidate or avoid the application of our existing or future intellectual property rights that we obtain or license. The loss of protection for our intellectual property rights could reduce the market value of our brands and our products and solutions, reduce new customer originations or upgrade sales to existing customers, lower our profits, and could have a material adverse effect on our business, financial condition, cash flows, or results of operations.

Our policy is to require our employees that were hired and contractors that were engaged to develop material intellectual property included in our products to execute written agreements in which they assign to us their rights in potential inventions and other intellectual property created within the scope of their employment (or, with respect to consultants and service providers, their engagement to develop such intellectual property), but we cannot assure you that we have adequately protected our rights in every such agreement or that we have executed an agreement with every such party. Finally, in order to benefit from the protection of intellectual property rights, we must monitor and detect infringement, misappropriation or other violations of our intellectual property rights and pursue infringement, misappropriation or other claims in certain circumstances in relevant jurisdictions, all of which are costly and time-consuming. As a result, we may not be able to obtain adequate protection or to effectively enforce our intellectual property rights.

In addition to registered trademarks, we rely on trade secret rights, copyrights and other rights to protect our unpatented proprietary intellectual property and technology. Despite our efforts to protect our proprietary technologies and our intellectual property rights, unauthorized parties, including our employees, consultants, service providers, or subscribers may attempt to copy aspects of our products or obtain and use our trade secrets or other confidential information. We generally enter into confidentiality agreements with our employees and third parties that have access to our material confidential information, and generally limit access to and distribution of our proprietary information and proprietary technology through certain procedural safeguards. These agreements may not effectively prevent unauthorized use or disclosure of our intellectual property or technology, could be breached or otherwise may not provide meaningful protection for our trade secrets and know-how related to the design, manufacture or operation of our products and solutions, and may not provide an adequate remedy in the event of unauthorized use or disclosure. We cannot assure you that the steps taken by us will prevent misappropriation of our intellectual property or technology or infringement of our intellectual property rights. Competitors may independently develop technologies, products, or solutions that are substantially equivalent or superior to our products and solutions or that inappropriately incorporate our proprietary technology into their products or they may hire our former employees who may misappropriate our proprietary technology or misuse our confidential information. In addition, if we expand the geography of our service offerings, the laws of some foreign countries where we may do business in the future may not protect intellectual property rights and technology to the same extent as the laws of the United States, and these countries may not enforce these laws as diligently as government agencies and private parties in the United States.

 

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From time to time, legal action by us may be necessary to enforce our intellectual property rights, to protect our trade secrets, to determine the validity and scope of the intellectual property rights of others, or to defend against claims of infringement, misappropriation, or invalidity. Such litigation could result in substantial costs and diversion of resources and could negatively affect our business, operating results and financial condition. If we are unable to protect our intellectual property and technology, we may find ourselves at a competitive disadvantage to others who need not incur the additional expense, time and effort required to create the innovative products that have enabled us to be successful to date.

Accusations of infringement of third-party intellectual property rights could materially and adversely affect our business.

There has been substantial litigation in the areas in which we operate regarding intellectual property rights and we may be sued for infringement from time to time in the future. Also, in some instances, we have agreed to indemnify our customers for expenses and liability resulting from claimed intellectual property infringement by our products and solutions. From time to time, we may receive requests for indemnification in connection with allegations of intellectual property infringement and we may choose, or be required, to assume the defense and/or reimburse our customers for their expenses, settlement and/or liability. We cannot assure you that we will be able to settle any future claims or, if we are able to settle any such claims, that the settlement will be on terms favorable to us. Our broad range of technology may increase the likelihood that third parties will claim that we, or our customers infringe their intellectual property rights.

We have in the past received, and may in the future receive, notices of allegations of infringement, misappropriation or misuse of other parties’ proprietary rights. Furthermore, regardless of their merits, accusations and lawsuits like these, may require significant time and expense to defend, may negatively affect customer relationships, may divert management’s attention away from other aspects of our operations and, upon resolution, may have a material adverse effect on our business, results of operations, financial condition, and cash flows.

Certain technology necessary for us to provide our products and solutions may, in fact, be patented by other parties either now or in the future. If such technology were validly patented by another person, we would have to negotiate a license for the use of that technology. We may not be able to negotiate such a license at a price that is acceptable to us or at all. The existence of such a patent, or our inability to negotiate a license for any such technology on acceptable terms, could force us to cease using the technology and cease offering subscriptions incorporating the technology, which could materially and adversely affect our business and results of operations.

If we, or any of our products or solutions, were found to be infringing on the intellectual property rights of any third party, we could be subject to liability for such infringement, which could be material. We could also be prohibited from using or selling certain subscriptions, prohibited from using certain processes, or required to redesign certain products, each of which could have a material adverse effect on our business and results of operations.

These and other outcomes may:

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result in the loss of a substantial number of existing customers or prohibit the acquisition of new customers;

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cause us to pay license fees for intellectual property we are deemed to have infringed;

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cause us to incur costs and devote valuable technical resources to redesigning our products or solutions;

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cause our cost of revenues to increase;

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cause us to accelerate expenditures to preserve existing revenues;

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materially and adversely affect our brand in the marketplace and cause a substantial loss of goodwill;

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cause us to change our business methods; and

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require us to cease certain business operations or offering certain products or features.

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Some of our products and solutions contain open source software, which may pose particular risks to our proprietary software, technologies, products, and solutions in a manner that could harm our business.

We use open source software in our products and solutions and anticipate using open source software in the future. Some open source software licenses require those who distribute open source software as part of their own software product to publicly disclose all or part of the source code to such software product or to make available any derivative works of the open source code on unfavorable terms or at no cost. The terms of many open source licenses to which we are subject have not been interpreted by U.S. or foreign courts, and 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 provide or distribute our products or services. Additionally, we could face claims from third parties claiming ownership of, or demanding release of, the open source software or derivative works that we developed using such software, which could include our proprietary source code, or otherwise seeking to enforce the terms of the applicable open source license. These claims could result in litigation and could require us to make our software source code freely available, purchase a costly license, or cease offering the implicated products or services unless and until we can re-engineer them to avoid infringement. This re-engineering process could require us to expend significant additional research and development resources, and we cannot guarantee that we will be successful.

Additionally, the use of certain open source software can lead to greater risks than use of third-party commercial software, as open source licensors generally do not provide warranties or controls on the origin of software. There is typically no support available for open source software, and we cannot ensure that the authors of such open source software will implement or push updates to address security risks or will not abandon further development and maintenance. Many of the risks associated with the use of open source software, such as the lack of warranties or assurances of title or performance, cannot be eliminated, and could, if not properly addressed, negatively affect our business. We have processes to help alleviate these risks, including a review process for screening requests from our developers for the use of open source software, but we cannot be sure that all open source software is identified or submitted for approval prior to use in our products and services. Any of these risks could be difficult to eliminate or manage, and, if not addressed, could have an adverse effect on our business, financial condition, and operating results.

Our smart home technology is subject to varying state and local regulations, which may be updated from time to time.

Our smart home technology is subject to certain state and local regulations, which may be updated from time to time. For example, our products and solutions are subject to regulations relating to building and fire codes, public safety, and may eventually be subject to state and local regulation regarding access control systems. The regulations to which we are subject may change, additional regulations may be imposed, or existing regulations may be applied in a manner that creates special requirements for the implementation and operation of our products and solutions that may significantly impact or even eliminate some of our revenues or markets. In addition, we may incur material costs or liabilities in complying with any such regulations. Furthermore, some of our customers must comply with numerous laws and regulations, which may affect their willingness and ability to purchase our products and solutions. The modification of existing laws and regulations or interpretations thereof or the adoption of future laws and regulations could adversely affect our business, cause us to modify or alter our methods of operations and increase our costs and the price of our products and solutions. In addition, we cannot provide any assurance that we will be able, for financial or other reasons, to comply with all applicable laws and regulations. If we fail to comply with these laws and regulations, we could become subject to substantial penalties or restrictions that could materially and adversely affect our business.

The outbreak of the COVID-19 pandemic and future resurgences or the development of variants thereof, could have an adverse effect on our business, results of operations, and financial condition.

COVID-19 has caused significant volatility in financial markets and has caused what is likely to be an extended global recession. Public health problems resulting from COVID-19 and precautionary measures instituted by governments and businesses to mitigate its spread, including travel restrictions and quarantines, could continue to contribute to a general slowdown in the global economy, adversely impact our customers, third-party suppliers and other business partners, and disrupt our operations. Changes in our and our

 

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customers’ operations in response to COVID-19 or employee illnesses resulting from the pandemic has resulted in and may continue to result in inefficiencies or delays, including in sales, delivery, and product development efforts, and additional costs related to business continuity initiatives, that cannot be fully mitigated through succession and business continuity planning, employees working remotely or teleconferencing technologies.

COVID-19 and related governmental reactions have had and may continue to have a negative impact on our business, liquidity, results of operations, and stock price due to the occurrence of some or all of the following events or circumstances, among others:

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restricted access to customers’ properties and communities, leading to suspensions and interruptions in product installation;

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our inability to manage our business effectively due to key employees becoming ill, working from home inefficiently, and being unable to travel to our facilities;

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our and our customers’, third-party suppliers’ and other business partners’ inability to operate worksites, including construction sites, manufacturing facilities and shipping and fulfillment centers, due to employee illness or reluctance to appear at work, or “stay-at-home” regulations;

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interruptions in manufacturing (including the sourcing of key components) and shipment of our products;

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disruptions of the operations of our third-party suppliers, which could impact our ability to purchase components at efficient prices and in sufficient amounts;

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reduced demand for our products and services, including due to any prolonged economic downturn that may occur;

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our inability to raise additional capital or the dilution of our common stock if we raise capital by issuing equity securities; and

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volatility in the market price of the Post-Combination Company’s common stock.

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The extent of the impact of COVID-19 on our business and financial results will depend largely on future developments, including the duration of the spread of the outbreak, effectiveness of vaccines and vaccine rollouts, the impact on capital and financial markets, and the related impact on the financial circumstances of our customers and their residents, all of which are highly uncertain and cannot be predicted. This situation is changing rapidly, and additional impacts may arise that we are not aware of currently.

Failure of our global operations to comply with import and export, bribery, and money laundering laws, regulations and controls, could have an adverse impact on our financial condition.

We conduct our business in the United States and source our products from Asia, Europe and the United States. We are subject to regulation by various federal, state, local and foreign governmental agencies, including, but not limited to, agencies and regulatory bodies or authorities responsible for monitoring and enforcing product safety and consumer protection laws, data privacy and security laws and regulations, employment and labor laws, workplace safety laws and regulations, environmental laws and regulations, antitrust laws, federal securities laws, and tax laws and regulations.

We are subject to the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Foreign Corrupt Practices Act of 1977, as amended, the U.S. Travel Act of 1961, and possibly other anti-bribery laws, including those that comply with the Organization for Economic Cooperation and Development, Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and other international conventions. Anti-corruption laws are interpreted broadly and prohibit our company from authorizing, offering, or providing directly or indirectly improper payments or benefits to recipients in the public or private sector. Certain laws could also prohibit us from soliciting or accepting bribes or kickbacks. We can be held liable for the corrupt activities of our employees, representatives, contractors, partners, and agents, even if we did not explicitly authorize such activity. Although we have implemented policies and procedures designed to ensure compliance with anti-corruption laws, there can be no assurance that all of our employees, representatives, contractors, partners, and agents will comply with these laws and policies.

 

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Our operations require us to import from Asia and Europe, which geographically stretches our compliance obligations. We are also subject to anti-money laundering laws such as the USA PATRIOT Act of 2001 and may be subject to similar laws in other jurisdictions. Our products are subject to export control and import laws and regulations, including the U.S. Export Administration Regulations, U.S. Customs regulations, and various economic and trade sanctions regulations administered by the U.S. Department of the Treasury’s (“Treasury”) Office of Foreign Assets Controls. We may also be subject to import/export laws and regulations in other jurisdictions in which we conduct business or source our products. If we fail to comply with these laws and regulations, we and certain of our employees could be subject to substantial civil or criminal penalties, including the possible loss of export or import privileges; fines, which may be imposed on us and responsible employees or managers; and, in extreme cases, the incarceration of responsible employees or managers.

Changes in laws that apply to us could result in increased regulatory requirements and compliance costs which could harm our business, financial condition, cash flows, and results of operations. In certain jurisdictions, regulatory requirements may be more stringent than in the United States. Noncompliance with applicable regulations or requirements could subject us to whistleblower complaints, investigations, sanctions, settlements, mandatory product recalls, enforcement actions, disgorgement of profits, fines, damages, civil and criminal penalties or injunctions, suspension or debarment from contracting with certain governments or other customers, the loss of export privileges, multi-jurisdictional liability, reputational harm, and other collateral consequences. If any governmental or other sanctions are imposed, or if we do not prevail in any possible civil or criminal litigation, our business, financial condition, cash flows and results of operations could be materially harmed. In addition, responding to any action will likely result in a materially significant diversion of management’s attention and resources and an increase in defense costs and other professional fees.

Expanding our international operations subject us to a variety of risks and uncertainties, including exposure to foreign currency exchange rate fluctuations, which could adversely affect our business and operating results.

We are planning to expand our international operations to Canada and the United Kingdom and may further grow our international presence in the future. The future success of our business will depend, in part, on our ability to expand our operations and customer base worldwide. Operating in international markets requires significant resources and management attention and will subject us to regulatory, economic, and political risks that are different from those in the United States. Due to our lack of experience with international operations and developing and managing sales and distribution channels in international markets, our international expansion efforts may not be successful. In addition, we will face risks in doing business internationally that could materially and adversely affect our business, including:

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our ability to comply with differing and evolving technical and environmental standards, telecommunications regulations, building and fire codes, and certification requirements outside the United States;

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difficulties and costs associated with staffing and managing foreign operations;

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our ability to effectively price our products and solutions in competitive international markets;

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potentially greater difficulty collecting accounts receivable and longer payment cycles;

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the need to adapt and localize our products and subscriptions for specific countries;

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the need to offer customer care in various native languages;

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reliance on third parties over which we have limited control;

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availability of reliable network connectivity in targeted areas for expansion;

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difficulties in understanding and complying with local laws, regulations, and customs in foreign jurisdictions;

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restrictions on travel to or from countries in which we operate or inability to access certain areas;

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changes in diplomatic and trade relationships, including tariffs and other non-tariff barriers, such as quotas and local content rules;

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•

U.S. government trade restrictions, including those which may impose restrictions such as prohibitions, on the exportation, re-exportation, sale, shipment or other transfer of programming, technology, components, and/or services to foreign persons;

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•

our ability to comply with different and evolving laws, rules, and regulations, including the European Union General Data Protection Regulation and other data privacy and data protection laws, rules and regulations;

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compliance with various anti-bribery and anti-corruption laws such as the Foreign Corrupt Practices Act and U.K. Bribery Act of 2010;

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more limited protection for intellectual property rights in some countries;

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adverse tax consequences;

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fluctuations in currency exchange rates;

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exchange control regulations, which might restrict or prohibit our conversion of other currencies into U.S. Dollars;

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new and different sources of competition;

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political and economic instability created by the United Kingdom’s departure from the European Union;

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deterioration of political relations between the United States and other countries in which we may operate; or

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political or social unrest, economic instability, conflict or war in such countries, or sanctions implemented by the United States against countries in which we operate, all of which could have a material adverse effect on our operations.

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Our failure to successfully manage these risks could harm our international operations and have an adverse effect on our business, financial condition, and operating results.

Fluctuations in foreign currencies in which we transact business also subject us to certain risks. While we have historically transacted in U.S. Dollars with the majority of our customers and suppliers, we have transacted in some foreign currencies, such as the Euro, the Canadian dollar, the Croatian Krona and the Chinese Renminbi and may transact in more foreign currencies in the future. Accordingly, changes in the value of foreign currencies relative to the U.S. Dollar may affect our revenue and operating results. As a result of such foreign currency exchange rate fluctuations, it could be more difficult to detect underlying trends in our business and operating results. In addition, to the extent that fluctuations in currency exchange rates cause our operating results to differ from our expectations or the expectations of our investors, the trading price of the Post-Combination Company’s common stock could be lowered.

Insurance policies may not cover all of our operating risks and a casualty loss beyond the limits of our coverage could negatively impact our business.

We are subject to all of the operating hazards and risks normally incidental to the provision of our products and solutions and business operations. In addition to contractual provisions limiting our liability to customers and third parties, we maintain insurance policies in such amounts and with such coverage and deductibles as required by law and that we believe are reasonable and prudent. Nevertheless, such insurance may not be adequate to protect us from all the liabilities and expenses that may arise from claims for personal injury, death, or property damage arising in the ordinary course of our business and current levels of insurance may not be able to be maintained or may not be available at economical prices. If a significant liability claim is brought against us that is not covered by insurance, then we may have to pay the claim with our own funds, which could have a material adverse effect on our business, financial condition, cash flows or results of operations.

Downturns in general economic and market conditions and reductions in spending may reduce demand for our products and solutions, which could harm our revenue, results of operations and cash flows.

Our revenue, results of operations and cash flows depend on the overall demand for our products and solutions. Negative conditions in the general economy both in the United States and abroad, including

 

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conditions resulting from changes in gross domestic product growth, financial and credit market fluctuations, construction slowdowns, energy costs, international trade relations and other geopolitical issues, the availability and cost of credit, and the global housing and mortgage markets could cause a decrease in consumer discretionary spending and business investment and diminish growth expectations in the U.S. economy and abroad.

During weak economic times, the available pool of potential customers may decline as the prospects for new multifamily apartment and single-family rental construction and residential building renovation projects diminish, which may have a corresponding impact on our growth prospects. In addition, there is an increased risk during these periods that an increased percentage of property developers will file for bankruptcy protection, which may harm our revenue, profitability and results of operations. In addition, we may determine that the cost of pursuing any claim may outweigh the recovery potential of such claim. Prolonged economic slowdowns and reductions in new residential and commercial building construction and renovation projects may result in diminished sales of our software, services and products. Further worsening, broadening or protracted extension of an economic downturn could have a negative impact on our business, revenue, results of operations and cash flows.

Changes in effective tax rates, or adverse outcomes resulting from examination of our income or other tax returns, could adversely affect our results of operations and financial condition.

Our future effective tax rates could be subject to volatility or adversely affected by a number of factors, including:

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changes in the valuation of our deferred tax assets and liabilities;

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expiration of, or lapses in, the research and development tax credit laws;

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expiration or non-utilization of net operating loss carryforwards;

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tax effects of share-based compensation;

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expansion into new jurisdictions;

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potential challenges to and costs related to implementation and ongoing operation of our intercompany arrangements;

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changes in tax laws and regulations and accounting principles, or interpretations or applications thereof; and

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certain non-deductible expenses as a result of acquisitions.

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Any changes in our effective tax rate could adversely affect our results of operations.

From time to time, we may be subject to legal proceedings, regulatory disputes, and governmental inquiries that could cause us to incur significant expenses, divert our management’s attention, and materially harm our business, financial condition, and operating results.

From time to time, we may be subject to claims, lawsuits, government investigations, and other proceedings involving products liability, competition and antitrust, intellectual property, privacy, consumer protection, securities, tax, labor and employment, commercial disputes, and other matters that could adversely affect our business operations and financial condition. As our business grows, we may see a rise in the number and significance of these disputes and inquiries. Litigation and regulatory proceedings, and particularly the intellectual property infringement matters that we could face, may be protracted and expensive, and the results are difficult to predict. Additionally, our litigation costs could be significant. Adverse outcomes with respect to litigation or any of these legal proceedings may result in significant settlement costs or judgments, penalties and fines, or require us to modify our products or services, make content unavailable, or require us to stop offering certain features, all of which could negatively affect our membership and revenue growth. See the section titled “Information About SmartRent — Legal Proceedings.”

The results of litigation, investigations, claims, and regulatory proceedings cannot be predicted with certainty, and determining reserves for pending litigation and other legal and regulatory matters requires significant judgment. There can be no assurance that our expectations will prove correct, and even if these

 

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matters are resolved in our favor or without significant cash settlements, these matters, and the time and resources necessary to litigate or resolve them, could harm our business, financial condition, and operating results.

Our business is subject to the risk of earthquakes, fire, power outages, floods, and other catastrophic events, and to interruption by manmade problems such as terrorism.

Our business is vulnerable to damage or interruption from earthquakes, fires, floods, power losses, telecommunications failures, terrorist attacks, acts of war, human errors, break-ins, and similar events. The third-party systems and operations and manufacturers we rely on are subject to similar risks. For example, a significant natural disaster, such as an earthquake, fire, or flood, could have an adverse effect on our business, financial condition and operating results, and our insurance coverage may be insufficient to compensate us for losses that may occur. Acts of terrorism, which may be targeted at metropolitan areas that have higher population density than rural areas, could also cause disruptions in our or our suppliers’ and manufacturers’ businesses or the economy as a whole. We may not have sufficient protection or recovery plans in some circumstances, such as natural disasters affecting locations that store significant inventory of our products or that house our servers. As we rely heavily on our computer and communications systems, and the internet to conduct our business and provide high-quality customer service, these disruptions could negatively impact our ability to run our business and either directly or indirectly disrupt suppliers’ and manufacturers’ businesses, which could have an adverse effect on our business, financial condition, and operating results.

Risks Related to FWAA and the Business Combination

In this section, unless otherwise noted or the context otherwise requires, “we”, “us”, and “our” refer to FWAA.

SmartRent’s stockholders will have a reduced ownership and voting interest after the Business Combination and will exercise less influence over management.

SmartRent’s stockholders currently have the right to vote in the election of the SmartRent board of directors and on other matters requiring stockholder approval under Delaware law and SmartRent’s charter and bylaws. Upon the completion of the Business Combination, SmartRent stockholders who become stockholders of the Post-Combination Company will have a percentage ownership of the Post-Combination Company that is smaller than such stockholders’ percentage ownership of SmartRent. Based on the number of issued and outstanding shares of FWAA common stock and SmartRent capital stock, in each case as of March 31, 2021, and based on the merger consideration, stockholders of SmartRent, as a group, will receive shares in the Business Combination constituting (on a fully diluted basis) approximately 72.5% of the Post-Combination Company’s common stock expected to be outstanding immediately after the Business Combination, assuming no FWAA public stockholder exercises redemption rights in connection with completion of the Business Combination. Because of this, current SmartRent stockholders, as a group, will have less influence on the board of directors, management and policies of the Post-Combination Company than they now have on the board of directors, management and policies of SmartRent.

FWAA stockholders will have a reduced ownership and voting interest after the Business Combination and will exercise less influence over management.

Upon the issuance of the shares to SmartRent stockholders, current FWAA stockholders’ percentage ownership will be diluted. All seven expected members of the Post-Combination Company’s board of directors after the completion of the Business Combination will be directors nominated by SmartRent (subject to FWAA’s consent right with respect to two such directors). The percentage of the Post-Combination Company’s common stock that will be owned by current FWAA stockholders as a group will vary based on the number of Public Shares for which the holders thereof request redemption in connection with the Business Combination. To illustrate the potential ownership percentages of current FWAA stockholders under different redemption levels, based on the number of issued and outstanding shares of FWAA common stock and SmartRent capital stock on March 31, 2021, and based on the merger consideration, current FWAA stockholders (including the Sponsor and directors of FWAA), as a group, will own (1) if there are

 

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no redemptions of Public Shares, 20.3% of the Post-Combination Company’s common stock expected to be outstanding immediately after the Business Combination (on a fully diluted basis) or (2) if there is the maximum level of redemption of the Public Shares at which the Minimum Cash Condition under the Merger Agreement will be satisfied, approximately 10% of the Post-Combination Company’s common stock expected to be outstanding immediately after the Business Combination (on a fully diluted basis). Because of this, current FWAA stockholders, as a group, will have less influence on the board of directors, management and policies of the Post-Combination Company than they now have on the board of directors, management and policies of FWAA.

The market price of shares of the Post-Combination Company’s Class A common stock may be affected by factors different from those currently affecting the prices of shares of FWAA Class A common stock.

Upon completion of the Business Combination, holders of shares of SmartRent common stock and preferred stock will become holders of shares of the Post-Combination Company’s Class A common stock. Prior to the Business Combination, FWAA has had limited operations. Upon completion of the Business Combination, the Post-Combination Company’s results of operations will depend upon the performance of SmartRent’s businesses, which are affected by factors that are different from those currently affecting the results of operations of FWAA.

If the Business Combination’s benefits do not meet the expectations of financial analysts, the market price of our common stock may decline.

The market price of our common stock may decline as a result of the Business Combination if we do not achieve the perceived benefits of the Business Combination as rapidly, or to the extent anticipated by, financial analysts or the effect of the Business Combination on our financial results is not consistent with the expectations of financial analysts. Accordingly, holders of our common stock following the consummation of the Business Combination may experience a loss as a result of a decline in the market price of such common stock. In addition, a decline in the market price of our common stock following the consummation of the Business Combination could adversely affect our ability to issue additional securities and to obtain additional financing in the future.

There can be no assurance that the Post-Combination Company’s common stock will be approved for continued listing on the Nasdaq or that the Post-Combination Company will be able to comply with the continued listing standards of Nasdaq.

In connection with the closing of the Business Combination, we intend to list the Post-Combination Company’s common stock on the Nasdaq under the symbol “SMRT.” If, after the Business Combination, Nasdaq delists the Post-Combination Company’s shares from trading on its exchange for failure to meet the listing standards, the Post-Combination Company and its stockholders could face significant material adverse consequences including:

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a limited availability of market quotations for the Post-Combination Company’s securities;

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reduced liquidity for the Post-Combination Company’s securities;

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•

a determination that the Post-Combination Company’s common stock is a “penny stock” which will require brokers trading in the Post-Combination Company’s common stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for shares of the Post-Combination Company’s common stock;

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a limited amount of analyst coverage; and

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a decreased ability to issue additional securities or obtain additional financing in the future.

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The consummation of the Business Combination 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 Business Combination may not be completed.

The Merger Agreement is subject to a number of conditions which must be fulfilled in order to complete the Business Combination. Those conditions include: approval of the Merger Agreement and the

 

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preferred stock conversion by SmartRent stockholders, approval of the Business Combination Proposal, the Charter Proposal, and the Nasdaq Proposal by FWAA stockholders, as well as the expiration or termination of all specified waiting periods under the HSR Act, absence of orders prohibiting completion of the Business Combination, effectiveness of the registration statement of which this proxy statement/prospectus is a part, the approval for continued listing on the Nasdaq of FWAA Class A common stock as of the date of the Closing (subject only to the requirement to have a sufficient number of round lot holders pursuant to the Nasdaq listing rules), the requirement that FWAA have funds contained in the Trust Account at Closing (net of the aggregate amount of cash proceeds that will be required to satisfy the redemption of any shares of FWAA Class A common stock, but without taking into account any transaction expenses), together with the cash proceeds anticipated from the Subscription Agreements, equal to or in excess of $250.0 million, the accuracy of the representations and warranties by both parties (subject to the materiality standards set forth in the Merger Agreement), the performance by both parties of their covenants and agreements and no material adverse effect having occurred with respect to either FWAA or SmartRent. These conditions to the Closing may not be fulfilled in a timely manner or at all, and, accordingly, the Business Combination may not be completed. In addition, the parties can mutually decide to terminate the Merger Agreement at any time, before or after stockholder approval, or FWAA or SmartRent may elect to terminate the Merger Agreement in certain other circumstances. See “The Merger Agreement — Termination” beginning on page 205.

The parties to the Merger Agreement may amend the terms of the Merger Agreement or waive one or more of the conditions to the Business Combination, and the exercise of discretion by FWAA’s directors and officers in agreeing to changes to the terms of or waivers of closing conditions in the Merger Agreement may result in a conflict of interest when determining whether such changes to the terms of the Merger Agreement or waivers of conditions are appropriate and in the best interests of our stockholders.

In the period leading up to the Closing, other events may occur that, pursuant to the Merger Agreement, would require FWAA to agree to amend the Merger Agreement, to consent to certain actions or to waive certain closing conditions or other rights that FWAA is entitled to under the Merger Agreement. Such events could arise because of changes in the course of SmartRent’s business, a request by SmartRent 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 SmartRent’s business and would entitle FWAA to terminate the Merger Agreement. In any of such circumstances, it would be in FWAA’s discretion, acting through the FWAA Board, to grant FWAA’s consent or waive FWAA’s rights. The existence of the financial and personal interests of the directors and officers described elsewhere in this proxy statement/prospectus may result in a conflict of interest on the part of one or more of the directors or officers between what he or she may believe is best for FWAA and FWAA’s stockholders and what he or she may believe is best for himself or herself or his or her affiliates in determining whether or not to take the requested action.

For example, it is a condition to FWAA’s obligation to close the Business Combination that SmartRent’s representations and warranties be true and correct as of the Closing subject to the applicable materiality standards as set forth in the Merger Agreement. Even, if the FWAA Board determines that any such breach is material to the business of SmartRent, the FWAA Board may elect to waive that condition and close the Business Combination. The parties will not waive the condition that FWAA’s stockholders approve the Business Combination.

As of the date of this proxy statement/prospectus, FWAA does not believe there will be any material changes or waivers that FWAA’s Board would be likely to make after stockholder approval of the Business Combination has been obtained. While certain changes could be made without further stockholder approval, if there is a change to the terms of the Business Combination that would have a material impact on the FWAA stockholders, FWAA will be required to circulate a new or amended proxy statement or supplement thereto and resolicit the vote of FWAA stockholders with respect to the Business Combination Proposal.

Termination of the Merger Agreement could negatively impact SmartRent and FWAA.

If the Business Combination is not completed for any reason, including as a result of SmartRent stockholders declining to adopt the Merger Agreement or FWAA stockholders declining to approve the proposals required to effect the Business Combination, the ongoing businesses of SmartRent and FWAA

 

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may be adversely impacted and, without realizing any of the anticipated benefits of completing the Business Combination, SmartRent and FWAA would be subject to a number of risks, including the following:

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SmartRent or FWAA may experience negative reactions from the financial markets, including negative impacts on its stock price (including to the extent that the current market price reflects a market assumption that the Business Combination will be completed);

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SmartRent may experience negative reactions from its customers, resellers, vendors and employees;

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SmartRent and FWAA will have incurred substantial expenses and will be required to pay certain costs relating to the Business Combination, whether or not the Business Combination is completed; and

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since the Merger Agreement restricts the conduct of SmartRent’s and FWAA’s businesses prior to completion of the Business Combination, each of SmartRent and FWAA may not have been able to take certain actions during the pendency of the Business Combination that would have benefitted it as an independent company, and the opportunity to take such actions may no longer be available (see the section entitled “The Merger Agreement — Covenants and Agreements” beginning on page 193 of this proxy statement/prospectus for a description of the restrictive covenants applicable to SmartRent and FWAA).

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If the Merger Agreement is terminated and SmartRent’s board of directors seeks another merger or business combination, SmartRent stockholders cannot be certain that SmartRent will be able to find a party willing to offer equivalent or more attractive consideration than the consideration FWAA has agreed to provide in the Business Combination or that such other merger or business combination is completed. If the Merger Agreement is terminated and the FWAA Board seeks another merger or business combination, FWAA stockholders cannot be certain that FWAA will be able to find another acquisition target that would constitute a business combination or that such other business combination will be completed. See “The Merger Agreement — Termination” on page 205.

SmartRent will be subject to business uncertainties and contractual restrictions while the Business Combination is pending.

Uncertainty about the effect of the Business Combination on employees and customers may have an adverse effect on SmartRent and consequently on FWAA. These uncertainties may impair SmartRent’s ability to attract, retain and motivate key personnel until the Business Combination is completed and could cause customers and others that deal with SmartRent to seek to change existing business relationships with SmartRent. Retention of certain employees may be challenging during the pendency of the Business Combination as certain employees may experience uncertainty about their future roles. If key employees depart because of issues relating to the uncertainty and difficulty of integration or a desire not to remain with the business, our business following the Business Combination could be negatively impacted. In addition, the Merger Agreement restricts SmartRent from taking certain specified actions without the consent of FWAA until the Business Combination occurs. These restrictions may prevent SmartRent from pursuing attractive business opportunities that may arise prior to the completion of the Business Combination. See “The Merger Agreement — Covenants and Agreements” beginning on page 193.

FWAA directors and officers may have interests in the Business Combination different from the interests of FWAA stockholders.

Executive officers of FWAA negotiated the terms of the Merger Agreement with their counterparts at SmartRent, and the FWAA Board determined that entering into the Merger Agreement was in the best interests of FWAA and its stockholders, declared the Merger Agreement advisable and recommended that FWAA stockholders approve the proposals required to effect the Business Combination. In considering these facts and the other information contained in this proxy statement/prospectus, you should be aware that FWAA’s executive officers and directors may have financial interests in the Business Combination that may be different from, or in addition to, the interests of FWAA stockholders. The FWAA Board was aware of and considered these interests, among other matters, in reaching the determination to approve the terms of the Business Combination and in recommending to FWAA’s stockholders that they vote to approve the Business Combination. For a detailed discussion of the special interests that FWAA’s directors and executive

 

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officers may have in the Business Combination, please see the section entitled “The Business Combination — Interests of FWAA’s Sponsor, Directors and Officers in the Business Combination” beginning on page 183.

SmartRent directors and officers may have interests in the Business Combination different from the interests of SmartRent stockholders.

Executive officers of SmartRent negotiated the terms of the Merger Agreement with their counterparts at FWAA, and the SmartRent board of directors determined that entering into the Merger Agreement was in the best interests of SmartRent and its stockholders. In considering these facts and the other information contained in this proxy statement/prospectus, you should be aware that SmartRent’s executive officers and directors may have financial interests in the Business Combination that may be different from, or in addition to, the interests of SmartRent stockholders. The SmartRent board of directors was aware of and considered these interests, among other matters, in reaching the determination to approve the terms of the Business Combination. For a detailed discussion of the special interests that SmartRent’s directors and executive officers may have in the Business Combination, please see the section entitled “The Business Combination — Interests of SmartRent’s Directors and Executive Officers in the Business Combination” beginning on page 186.

The Sponsor may have interests in the Business Combination different from the interests of FWAA stockholders.

When considering our board of directors’ recommendation that our stockholders vote in favor of the approval of the Business Combination Proposal and the other Proposals described in this proxy statement, our stockholders should be aware that the Sponsor has interests in the Business Combination that may be different from, in addition to, or conflict with the interests of our stockholders in general. For a more complete description of these interests, see the section entitled “The Business Combination — Interests of FWAA’s Sponsor, Directors and Officers in the Business Combination” beginning on page 183.

The Business Combination will result in changes to the board of directors that may affect our strategy.

If the parties complete the Business Combination and the Director Election Proposal is approved, the composition of the Post-Combination Company’s board of directors will change from the current boards of directors of FWAA and SmartRent. The board of directors of the Post-Combination Company will be divided into three classes and will consist of the directors elected pursuant to the Director Election Proposal, each of which will serve an initial term ending in either 2022, 2023 or 2024, and thereafter will serve a three-year term. This new composition of the Post-Combination Company board of directors may affect our business strategy and operating decisions upon the completion of the Business Combination.

Fifth Wall and its affiliates have no obligations to invest in or support the business or operations of the Post-Combination Company.

Except for certain limited obligations of Sponsor related to the disposition of its Founder Shares in FWAA (see “Other Agreements — Sponsor Agreement”), Fifth Wall in not a party to the proposed transaction agreements between FWAA and SmartRent or related transactions.

It is possible that the Post-Combination Company may benefit from its relationship with Fifth Wall as an investor given Fifth Wall’s knowledge and expertise in the proptech industry and its relationships with its strategic limited partners in the multifamily and homebuilding industries. However, neither Fifth Wall, nor any of its partners, employees or other representatives will have at any time, any legal obligation or commitment to SmartRent or its affiliates to promote, advertise, market, or support financially or otherwise the products, services, business or operations of the Post-Combination Company. Fifth Wall’s position following consummation of the proposed Merger will be solely that of an investor in the Post-Combination Company until such time as Fifth Wall may, subject to its contractual obligations, dispose of its shares in the Post-Combination Company.

The Merger Agreement contains provisions that may discourage other companies from trying to acquire SmartRent for greater merger consideration.

The Merger Agreement contains provisions that prohibit SmartRent from seeking alternative business combinations during the pendency of the Business Combination. These provisions include a general

 

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prohibition on SmartRent from soliciting or entering into discussions with any third party regarding any acquisition proposal or offers for competing transactions. SmartRent also has an unqualified obligation to submit the proposal to adopt the Merger Agreement to a vote by its stockholders, even if SmartRent receives an alternative acquisition proposal that its board of directors believes is superior to the Business Combination, unless the Merger Agreement has been terminated in accordance with its terms. See “The Merger Agreement — Termination” beginning on page 205.

The Merger Agreement contains provisions that may discourage FWAA from seeking an alternative business combination.

The Merger Agreement contains provisions that prohibit FWAA from seeking alternative business combinations during the pendency of the Business Combination. Further, if FWAA is unable to obtain the requisite approval of its stockholders, either party may terminate the Merger Agreement. See “The Merger Agreement — Termination” beginning on page 205.

The unaudited pro forma condensed combined financial information included in this proxy statement/​prospectus is preliminary and the actual financial condition and results of operations after the Business Combination may differ materially.

The unaudited pro forma financial information included in this proxy statement/prospectus is presented for illustrative purposes only and is not necessarily indicative of what our actual financial position or results of operations would have been had the Business Combination been completed on the date(s) indicated. The preparation of the pro forma financial information is based upon available information and certain assumptions and estimates that FWAA and SmartRent currently believe are reasonable. The unaudited pro forma financial information reflects adjustments, which are based upon preliminary estimates, among other things, to allocate the purchase price to SmartRent’s net assets. The purchase price allocation reflected in this proxy statement/prospectus is preliminary, and the final allocation of the purchase price will be based upon the actual purchase price and the fair value of the assets and liabilities of SmartRent as of the date of the completion of the Business Combination. In addition, following the completion of the Business Combination, there may be further refinements of the purchase price allocation as additional information becomes available. Accordingly, the final purchase accounting adjustments may differ materially from the pro forma adjustments reflected in this proxy statement/prospectus. See “Unaudited Pro Forma Condensed Combined Financial Information” beginning on page 59.

FWAA and SmartRent will incur significant transaction costs in connection with the Business Combination.

Each of FWAA and SmartRent has incurred and expects that it will incur significant, non-recurring costs in connection with consummating the Business Combination. SmartRent may also incur additional costs to retain key employees. FWAA and SmartRent will also incur significant legal, financial advisor, accounting, banking and consulting fees, fees relating to regulatory filings and notices, SEC filing fees, printing and mailing fees and other costs associated with the Business Combination. FWAA and SmartRent estimate that they will incur approximately $50.0 million in aggregate transaction costs, inclusive of $12.1 million of deferred underwriting commissions. Some of these costs are payable regardless of whether the Business Combination is completed. See “The Business Combination — Terms of the Business Combination” beginning on page 164.

SmartRent’s stockholders will have their rights as stockholders governed by the Post-Combination Company’s organizational documents.

As a result of the completion of the Business Combination, holders of shares of SmartRent common stock and preferred stock will become holders of shares of the Post-Combination Company’s Class A common stock, which will be governed by the Post-Combination Company’s organizational documents. As a result, there will be differences between the rights currently enjoyed by SmartRent stockholders and the rights that SmartRent stockholders who become stockholders of the Post-Combination Company will have as stockholders of the Post-Combination Company. See “Comparison of Stockholders’ Rights” beginning on page 216.

 

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FWAA’s and SmartRent’s ability to consummate the Business Combination, and the operations of the Post-Combination Company following the Business Combination, may be materially adversely affected by the recent COVID-19 pandemic.

The COVID-19 pandemic has resulted, and other infectious diseases could result, in a widespread health crisis that has and could continue to adversely affect the economies and financial markets worldwide, which may delay or prevent the consummation of the Business Combination, and the business of SmartRent or Post-Combination Company following the Business Combination could be materially and adversely affected. The extent of such impact will depend on future developments, which are highly uncertain and cannot be predicted.

The parties will be required to consummate the Business Combination even if SmartRent, its business, financial condition and results of operations are materially affected by COVID-19. The disruptions posed by COVID-19 have continued, and other matters of global concern may continue, for an extensive period of time, and if SmartRent is unable to recover from business disruptions due to COVID-19 or other matters of global concern on a timely basis, SmartRent’s ability to consummate the Business Combination and the Post-Combination Company’s financial condition and results of operations following the Business Combination may be materially adversely affected. Each of SmartRent and the Post-Combination Company may also incur additional costs due to delays caused by COVID-19, which could adversely affect the Post-Combination Company’s financial condition and results of operations.

Risks Related to Ownership of Our Class A Common Stock Following the Business Combination

In this section, unless otherwise noted or the context otherwise requires, “we”, “us”, and “our” refer to the Post-Combination Company.

Our Class A common stock price may be volatile or may decline regardless of our operating performance. You may lose some or all of your investment.

The trading price of our Class A common stock following the Business Combination is likely to be volatile. The stock market recently has experienced extreme volatility. This volatility often has been unrelated or disproportionate to the operating performance of particular companies. You may not be able to resell your shares at an attractive price due to a number of factors such as those listed in “— Risks Related to SmartRent’s Business and Industry” and the following:

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the impact of the COVID-19 pandemic on our financial condition and the results of operations;

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our operating and financial performance and prospects;

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our quarterly or annual earnings or those of other companies in our industry compared to market expectations;

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conditions that impact demand for our products and/or services;

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future announcements concerning our business, our clients’ businesses or our competitors’ businesses;

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the public’s reaction to our press releases, other public announcements and filings with the SEC;

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the market’s reaction to our reduced disclosure and other requirements as a result of being an “emerging growth company” under the Jumpstart Our Business Startups Act (the “JOBS Act”);

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the size of our public float;

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coverage by or changes in financial estimates by securities analysts or failure to meet their expectations;

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market and industry perception of our success, or lack thereof, in pursuing our growth strategy;

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strategic actions by us or our competitors, such as acquisitions or restructurings;

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changes in laws or regulations which adversely affect our industry or us;

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privacy and data protection laws, privacy or data breaches, or the loss of data;

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changes in accounting standards, policies, guidance, interpretations or principles;

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changes in senior management or key personnel;

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issuances, exchanges or sales, or expected issuances, exchanges or sales of our capital stock;

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changes in our dividend policy;

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adverse resolution of new or pending litigation against us; and

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changes in general market, economic and political conditions in the United States and global economies or financial markets, including those resulting from natural disasters, terrorist attacks, acts of war and responses to such events.

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These broad market and industry factors may materially reduce the market price of our Class A common stock, regardless of our operating performance. In addition, price volatility may be greater if the public float and trading volume of our Class A common stock is low. As a result, you may suffer a loss on your investment.

In the past, following periods of market volatility, stockholders have instituted securities class action litigation. If we were involved in securities litigation, it could have a substantial cost and divert resources and the attention of executive management from our business regardless of the outcome of such litigation.

We do not intend to pay dividends on our Class A common stock for the foreseeable future.

We currently intend to retain all available funds and any future earnings to fund the development and growth of SmartRent’s business. As a result, we do not anticipate declaring or paying any cash dividends on our Class A common stock in the foreseeable future. Any decision to declare and pay dividends in the future will be made at the discretion of the Post-Combination Company’s board of directors and will depend on, among other things, our business prospects, results of operations, financial condition, cash requirements and availability, certain restrictions related to our indebtedness, industry trends and other factors that our board of directors may deem relevant. Any such decision will also be subject to compliance with contractual restrictions and covenants in the agreements governing our current and future indebtedness. In addition, we may incur additional indebtedness, the terms of which may further restrict or prevent us from paying dividends on our common stock. As a result, you may have to sell some or all of your Class A common stock after price appreciation in order to generate cash flow from your investment, which you may not be able to do. Our inability or decision not to pay dividends, particularly when others in our industry have elected to do so, could also adversely affect the market price of our Class A common stock.

If securities analysts do not publish research or reports about us, or if they issue unfavorable commentary about us or our industry or downgrade our Class A common stock, the price of our Class A common stock could decline.

The trading market for our Class A common stock will depend in part on the research and reports that third-party securities analysts publish about us and the industries in which we operate. We may be unable or slow to attract research coverage and if one or more analysts cease coverage of us, the price and trading volume of our securities would likely be negatively impacted. If any of the analysts that may cover us change their recommendation regarding our securities adversely, or provide more favorable relative recommendations about our competitors, the price of our securities would likely decline. If any analyst that may cover us ceases covering us or fails to regularly publish reports on us, we could lose visibility in the financial markets, which could cause the price or trading volume of our securities to decline. Moreover, if one or more of the analysts who cover us downgrades our Class A common stock, or if our reporting results do not meet their expectations, the market price of our Class A common stock could decline.

Our issuance of additional shares of Class A common stock or convertible securities could make it difficult for another company to acquire us, may dilute your ownership of us and could adversely affect our stock price.

In connection with the proposed Business Combination, we intend to file a registration statement with the SEC on Form S-8 providing for the registration of shares of our Class A common stock issued or reserved for issuance under the Equity Incentive Plan and the SmartRent, Inc. 2021 Employee Stock Purchase Plan (the “ESPP”). Subject to the expiration of lockup agreements, shares registered under the registration

 

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statement on Form S-8 will be available for resale immediately in the public market without restriction. From time to time in the future, we may also issue additional shares of our Class A common stock or securities convertible into Class A common stock pursuant to a variety of transactions, including acquisitions. The issuance by us of additional shares of our Class A common stock or securities convertible into our Class A common stock would dilute your ownership of us and the sale of a significant amount of such shares in the public market could adversely affect prevailing market prices of our Class A common stock.

In the future, we expect to obtain financing or to further increase our capital resources by issuing additional shares of our capital stock or offering debt or other equity securities, including senior or subordinated notes, debt securities convertible into equity, or shares of preferred stock. Issuing additional shares of our capital stock, other equity securities, or securities convertible into equity may dilute the economic and voting rights of our existing stockholders, reduce the market price of our Class A common stock, or both. Debt securities convertible into equity could be subject to adjustments in the conversion ratio pursuant to which certain events may increase the number of equity securities issuable upon conversion. Preferred stock, if issued, could have a preference with respect to liquidating distributions or a preference with respect to dividend payments that could limit our ability to pay dividends to the holders of our common stock. Our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, which may adversely affect the amount, timing or nature of our future offerings. As a result, holders of our Class A common stock bear the risk that our future offerings may reduce the market price of our Class A common stock and dilute their percentage ownership. See “Description of Capital Stock of the Post-Combination Company.”

Future sales, or the perception of future sales, of our common stock by us or our existing stockholders in the public market following the closing of the Business Combination could cause the market price for our common stock to decline.

The sale of substantial amounts of shares of our Class A common stock in the public market, or the perception that such sales could occur, could harm the prevailing market price of shares of our common stock. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.

Upon consummation of the Business Combination, we will have a total of 217,350,800 shares of Class A common stock outstanding, consisting of (i) 157,678,300 shares issued to holders of shares of SmartRent common stock and SmartRent preferred stock, (ii) 15,500,000 shares issued pursuant to the Subscription Agreements, (iii) 34,500,000 shares held by FWAA’s public stockholders (assuming no redemptions by such public stockholders) and (iv) 9,672,500 shares held by the Sponsor and FWAA’s independent directors (which includes the Founder Shares and the Private Placement Shares). All shares issued as merger consideration in the Business Combination will be freely tradable, subject to certain lock-ups, without registration under the Securities Act and without restriction by persons other than our “affiliates” (as defined under Rule 144 of the Securities Act, referred to herein as “Rule 144”), including our directors, executive officers and other affiliates.

Upon the expiration or waiver of the lock-ups described above, shares held by certain of our stockholders will be eligible for resale, subject to, in the case of certain stockholders, volume, manner of sale and other limitations under Rule 144. In addition, pursuant to the Registration Rights Agreement, certain stockholders will have the right, subject to certain conditions, to require us to register the sale of their shares of our Class A common stock under the Securities Act. By exercising their registration rights and selling a large number of shares, these stockholders could cause the prevailing market price of our Class A common stock to decline. Following completion of the Business Combination, the shares covered by registration rights would represent approximately 71.4% of our outstanding common stock. See “Other Agreements — Registration Rights Agreement” for a description of these registration rights.

As restrictions on resale end or if these stockholders exercise their registration rights, the market price of shares of our Class A common stock could drop significantly if the holders of these shares sell them or are perceived by the market as intending to sell them. These factors could also make it more difficult for us to raise additional funds through future offerings of our shares of Class A common stock or other securities.

 

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In addition, the shares of our Class A common stock reserved for future issuance under the Equity Incentive Plan will become eligible for sale in the public market once those shares are issued, subject to provisions relating to various vesting agreements, lock-up agreements and, in some cases, limitations on volume and manner of sale by affiliates under Rule 144, as applicable. The number of shares to be reserved for future issuance under the Equity Incentive Plan is expected to equal 15,500,000 shares (all of which may be issued pursuant to the exercise of incentive stock options). The Post-Combination Company will also have the ability to initially issue up to 2,000,000 shares of the Post-Combination Company under the ESPP (assuming it is approved by stockholders at the Special Meeting), subject to annual increases effective as of January 1, 2022 and each subsequent January 1 through and including January 1, 2030 in an amount equal to the smallest of (i) 1% of the number of shares of the common stock outstanding as of the immediately preceding December 31, (ii) 2,000,000 shares or (iii) such amount, if any, as the Board may determine.

We expect to file one or more registration statements on Form S-8 under the Securities Act to register shares of our Class A common stock or securities convertible into or exchangeable for shares of our Class A common stock issued pursuant to our equity incentive plans. Any such Form S-8 registration statements will automatically become effective upon filing. Accordingly, shares registered under such registration statements will be available for sale in the open market. The initial registration statement on Form S-8 is expected to cover approximately 15,500,000 shares of our Class A common stock.

Subsequent to the consummation of the Business Combination, the Post-Combination Company may be required to take write-downs or write-offs, or the Post-Combination Company may be subject to restructuring, impairment or other charges that could have a significant negative effect on the Post-Combination Company’s financial condition, results of operations and the price of the Post-Combination Company’s securities, which could cause you to lose some or all of your investment.

Although FWAA has conducted due diligence on SmartRent, this diligence may not surface all material issues that may be present with SmartRent’s business. Factors outside of FWAA’s and outside of SmartRent’s control may, at any time, arise. As a result of these factors, the Post-Combination Company may be forced to later write-down or write-off assets, restructure its operations, or incur impairment or other charges that could result in the Post-Combination Company reporting losses. Even if FWAA’s due diligence successfully identified certain risks, unexpected risks may arise, and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and therefore not have an immediate impact on the Post-Combination Company’s liquidity, the fact that the Post-Combination Company reports charges of this nature could contribute to negative market perceptions about the Post-Combination Company or its securities. In addition, charges of this nature may cause the Post-Combination Company to be unable to obtain future financing on favorable terms or at all.

SmartRent’s management has limited experience in operating a public company.

SmartRent’s executive officers have limited experience in the management of a publicly traded company. SmartRent’s management team may not successfully or effectively manage its transition to a public company that will be subject to significant regulatory oversight and reporting obligations under federal securities laws. Their 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 their time may be devoted to these activities which will result in less time being devoted to the management and growth of the Post-Combination Company. SmartRent may not have adequate personnel with the appropriate level of knowledge, experience, and training in the accounting policies, practices or internal controls over financial reporting required of public companies in the United States. The development and implementation of the standards and controls necessary for the Post-Combination Company to achieve the level of accounting standards required of a public company in the United States may require costs greater than expected. It is possible that the Post-Combination Company will be required to expand its employee base and hire additional employees to support its operations as a public company which will increase its operating costs in future periods.

Anti-takeover provisions in our governing documents and under Delaware law could make an acquisition of us more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our common stock.

The Proposed Charter, the Post-Combination Company’s bylaws and Delaware law contain or will contain provisions that could have the effect of rendering more difficult, delaying, or preventing an

 

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acquisition deemed undesirable by the Post-Combination Company’s board of directors. Among other things, the Proposed Charter and/or the Post-Combination Company’s bylaws will include the following provisions:

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a staggered board, which means that our board of directors is classified into three classes of directors with staggered three-year terms and directors are only able to be removed from office for cause;

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limitations on convening special stockholder meetings, which could make it difficult for our stockholders to adopt desired governance changes;

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a prohibition on stockholder action by written consent, which means that our stockholders will only be able to take action at a meeting of stockholders and will not be able to take action by written consent for any matter;

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a forum selection clause, which means certain litigation against us can only be brought in Delaware;

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the authorization of undesignated preferred stock, the terms of which may be established and shares of which may be issued without further action by our stockholders; and

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advance notice procedures, which apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders.

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These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management. As a Delaware corporation, we are also subject to provisions of Delaware law, including Section 203 of the DGCL, which prevents interested stockholders, such as certain stockholders holding more than 15% of our outstanding common stock, from engaging in certain business combinations unless (i) prior to the time such stockholder became an interested stockholder, the board of directors approved the transaction that resulted in such stockholder becoming an interested stockholder, (ii) upon consummation of the transaction that resulted in such stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the common stock, or (iii) following board approval, such business combination receives the approval of the holders of at least two-thirds of our outstanding common stock not held by such interested stockholder at an annual or special meeting of stockholders.

Any provision of the Proposed Charter, the Post-Combination Company’s bylaws or Delaware law that has the effect of delaying, preventing or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock and could also affect the price that some investors are willing to pay for our common stock.

The Post-Combination Company’s bylaws will provide that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.

The Proposed Charter and the Post-Combination Company’s bylaws, each of which will become effective prior to the completion of the Business Combination, will provide that, unless we consent in writing to the selection of an alternative forum, the (a) Court of Chancery (the “Chancery Court”) 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) shall, to the fullest extent permitted by law, be the sole and exclusive forum for: (i) any derivative action, suit or proceeding brought on our behalf; (ii) any action, suit or proceeding asserting a claim of breach of fiduciary duty owed by any of our directors, officers, or stockholders to us or to our stockholders; (iii) any action, suit or proceeding asserting a claim arising pursuant to the DGCL, the Proposed Charter or the Post-Combination Company’s bylaws; or (iv) any action, suit or proceeding asserting a claim governed by the internal affairs doctrine; and (b) subject to the foregoing, 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. Notwithstanding the foregoing, such forum selection provisions shall not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal courts of the United States have exclusive jurisdiction. The choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or

 

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other employees, which may discourage such lawsuits against us and our directors, officers, and other employees. Alternatively, if a court were to find the choice of forum provision contained in the Proposed Charter to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations, and financial condition.

Additionally, 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. As noted above, the Proposed Charter and the Post-Combination Company’s bylaws will provide that the federal district courts of the United States of America shall have jurisdiction over any action arising under the Securities Act. Accordingly, there is uncertainty as to whether a court would enforce such provision. Our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder.

Risks Related to Redemption

In this section, unless otherwise noted or the context otherwise requires, “we”, “us”, and “our” refer to FWAA.

If third parties bring claims against FWAA, the proceeds held in the Trust Account could be reduced and the per share redemption amount received by stockholders may be less than $10.00 per share.

FWAA’s placement of funds in the Trust Account may not protect those funds from third-party claims against FWAA. Although FWAA has sought and will continue to seek to have all vendors, service providers, prospective target businesses, including SmartRent, or other entities with which FWAA does business execute agreements with FWAA waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of FWAA public stockholders, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the Trust Account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against FWAA’s assets, including the funds held in the Trust Account. If any third party refuses to execute an agreement waiving such claims to the monies held in the Trust Account, FWAA management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to FWAA than any alternative. WithumSmith+Brown, PC, our independent registered public accounting firm, did not execute agreements with FWAA waiving such claims to the monies held in the Trust Account.

FWAA’s independent directors may decide not to enforce the indemnification obligations of the Sponsor, resulting in a reduction in the amount of funds in the Trust Account available for distribution to FWAA’s public stockholders.

In the event that the proceeds in the Trust Account are reduced below the lesser of (i) $10.00 per Public Share or (ii) such lesser amount per 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 taxes, and the Sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, FWAA’s independent directors would determine whether to take legal action against the Sponsor to enforce its indemnification obligations.

While FWAA currently expects that FWAA’s independent directors would take legal action on its behalf against the Sponsor to enforce its indemnification obligations to FWAA, it is possible that FWAA’s independent directors in exercising their business judgment may choose not to do so if, for example, the cost of such legal action is deemed by the independent directors to be too high relative to the amount recoverable or if the independent directors determine that a favorable outcome is not likely. If FWAA’s independent directors choose not to enforce these indemnification obligations, the amount of funds in the Trust Account available for distribution to FWAA’s public stockholders may be reduced below $10.00 per share.

 

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There is no guarantee that a FWAA public stockholder’s decision whether to redeem their Public Shares for a pro rata portion of the Trust Account will put such stockholder in a better future economic position.

No assurance can be given as to the price at which a public stockholder may be able to sell the shares of our Class A common stock in the future following the completion of the Business Combination. Certain events following the consummation of any business combination, including the Business Combination, may cause an increase in FWAA’s stock price, and may result in a lower value realized now than a FWAA stockholder might realize in the future had the stockholder not elected to redeem such stockholder’s Public Shares. Similarly, if a FWAA public stockholder does not redeem his, her or its shares, such stockholder will bear the risk of ownership of FWAA’s Class A common stock after the consummation of the Business Combination, and there can be no assurance that a stockholder can sell his, her or its shares of our Class A common stock in the future for a greater amount than the redemption price set forth in this proxy statement/​prospectus. A FWAA public stockholder should consult his, her or its own tax and/or financial advisor for assistance on how this may affect its individual situation.

If FWAA public stockholders fail to comply with the redemption requirements specified in this proxy statement/​prospectus, they will not be entitled to redeem their Public Shares for a pro rata portion of the funds held in the Trust Account.

To exercise their redemption rights, holders are required to deliver their stock, either physically or electronically using Depository Trust Company’s DWAC System, to FWAA’s transfer agent two business days prior to the vote at the Special Meeting. If a holder properly seeks redemption as described in this proxy statement/prospectus and the Business Combination with SmartRent is consummated, FWAA will redeem these shares for a pro rata portion of funds deposited in the Trust Account and the holder will no longer own such shares following the Business Combination. See the section entitled “FWAA’s Special Meeting of Stockholders — Redemption Rights” for additional information on how to exercise your redemption rights.

The ability of FWAA stockholders to exercise redemption rights with respect to a large number of shares could increase the probability that the Business Combination would be unsuccessful and that stockholders would have to wait for liquidation in order to redeem their stock.

At the time FWAA entered into the Merger Agreement and related agreements for the Business Combination, FWAA did not know how many stockholders would exercise their redemption rights, and therefore FWAA structured the Business Combination based on its expectations as to the number of shares that will be submitted for redemption. The Merger Agreement requires that FWAA have funds contained in the Trust Account at Closing (net of the aggregate amount of cash proceeds that will be required to satisfy the redemption of any shares of FWAA Class A common stock, but without taking into account any transaction expenses), together with the cash proceeds anticipated from the Subscription Agreements, equal to or in excess of $250.0 million. If a larger number of shares are submitted for redemption than initially expected, the Minimum Cash condition may not be satisfied and we may need to restructure the transaction to reserve a greater portion of the cash in the Trust Account. The above considerations may limit our ability to complete the Business Combination or optimize our capital structure.

If, before distributing the proceeds in the Trust Account to FWAA’s public stockholders, FWAA files a bankruptcy petition or an involuntary bankruptcy petition is filed against FWAA that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of FWAA’s stockholders and the per share amount that would otherwise be received by FWAA’s stockholders in connection with FWAA’s liquidation may be reduced.

If, before distributing the proceeds in the Trust Account to FWAA’s public stockholders, FWAA files a bankruptcy petition or an involuntary bankruptcy petition is filed against FWAA that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included in FWAA’s bankruptcy estate and subject to the claims of third parties with priority over the claims of FWAA’s stockholders. To the extent any bankruptcy claims deplete the Trust Account, the per share amount that would otherwise be received by FWAA stockholders in connection with our liquidation may be reduced.

 

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If, after FWAA distributes the proceeds in the Trust Account to FWAA public stockholders, FWAA files a bankruptcy petition or an involuntary bankruptcy petition is filed against FWAA that is not dismissed, a bankruptcy court may seek to recover such proceeds, and FWAA and FWAA’s board may be exposed to claims of punitive damages.

If, after FWAA distributes the proceeds in the Trust Account to FWAA’s public stockholders, FWAA files a bankruptcy petition or an involuntary bankruptcy petition is filed against FWAA that is not dismissed, any distributions received by FWAA 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 FWAA stockholders. In addition, the FWAA Board may be viewed as having breached its fiduciary duty to FWAA’s creditors and/or having acted in bad faith, thereby exposing itself and FWAA to claims of punitive damages, by paying public stockholders from the Trust Account prior to addressing the claims of creditors.

If you or a “group” of stockholders of which you are a part are deemed to hold an aggregate of more than 15% of the Public Shares, you (or, if a member of such a group, all of the members of such group in the aggregate) will lose the ability to redeem all such shares in excess of 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 in Section 13(d)(3) of the Exchange Act), will be restricted from redeeming in the aggregate his, her or its Public Shares or, if part of such a group, the group’s Public Shares, in excess of 15% of the Public Shares without the consent of FWAA. Your inability to redeem any such excess Public Shares could result in you suffering a material loss on your investment in FWAA if you sell such excess Public Shares in open market transactions. FWAA cannot assure you that the value of such excess Public Shares will appreciate over time following the Business Combination or that the market price of the Public Shares will exceed the per-share redemption price.

However, FWAA’s stockholders’ ability to vote all of their Public Shares (including such excess shares) for or against the Business Combination Proposal is not restricted by this limitation on redemption.

Unlike some other blank check companies, FWAA does not have a specified maximum redemption threshold. The absence of such a redemption threshold will make it easier for us to consummate the Business Combination even if a substantial number of our stockholders redeem their shares.

Unlike some other blank check companies, FWAA does not have a specified maximum redemption threshold, except that we will not redeem Public Shares in an amount that would cause our net tangible assets to be less than $5,000,001. Some other blank check companies’ structures disallow the consummation of a business combination if the holders of such companies’ Public Shares elect to redeem or convert more than a specified percentage of the shares sold in such companies’ initial public offering. Because we have no such maximum redemption threshold, we may be able to consummate the Business Combination even though a substantial number of our public stockholders have redeemed their shares.

However, the Merger Agreement provides that the obligation of SmartRent to consummate the Business Combination is subject to the requirement that FWAA have funds contained in the Trust Account at Closing (net of the aggregate amount of cash proceeds that will be required to satisfy the redemption of any shares of FWAA Class A common stock, but without taking into account any transaction expenses), together with the cash proceeds anticipated from the Subscription Agreements, equal to or in excess of $250.0 million. While FWAA has entered into Subscription Agreements with respect to the Subscriptions to raise up to $155.0 million in the aggregate, there can be no assurance that the Subscribers will perform their obligations thereunder. In the event the aggregate cash consideration we would be required to pay for all shares of Class A common stock that are validly submitted for redemption plus the amount of required funds pursuant to the Merger Agreement exceed the aggregate amount of cash available to us, we will not complete the Business Combination or redeem any shares, all shares of Class A common stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.

 

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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Introduction

FWAA is providing the following unaudited pro forma condensed combined financial information to aid you in your analysis of the financial aspects of the Business Combination. The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses.”

FWAA is a blank check company formed under the laws of the State of Delaware on November 23, 2020 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

SmartRent is an enterprise software company that provides a fully integrated, brand-agnostic smart home operating system to residential property owners and operators, as well as homebuilders, home buyers, developers and residents. SmartRent’s operating system is designed to enable owners and operators to streamline property management and operations, lower operating costs, increase revenues, protect their assets through improved visibility and control over their properties and communities, and provide an elevated living experience for residents.

The unaudited Pro Forma Condensed Combined Balance Sheet as of December 31, 2020 combines the historical balance sheet of FWAA as of December 31, 2020, as adjusted to reflect the completion of the FWAA IPO on February 9, 2021, including the exercise of the underwriters’ over-allotment option and the issuance of the Private Placement Shares to the Sponsor, in each case, as if the FWAA IPO and the Private Placement had been consummated on December 31, 2020, with the historical balance sheet of SmartRent as of December 31, 2020 on a pro forma basis as if the Business Combination and related transactions, summarized below, had been consummated on December 31, 2020. The unaudited Pro Forma Condensed Combined Statement of Operations for the year ended December 31, 2020 combines the historical statements of operations of FWAA and SmartRent for such periods on a pro forma basis as if the Business Combination and related transactions, summarized below, had been consummated on January 1, 2020, the beginning of the earliest period presented:

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the merger of Merger Sub, the wholly owned subsidiary of FWAA, with and into SmartRent, with SmartRent as the surviving company;

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the conversion of all outstanding shares of SmartRent preferred stock into SmartRent common stock that will roll over into the Post-Combination Company;

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the rollover of FWAA’s outstanding 34,500,000 Public Shares (9,500,000 Public Shares assuming maximum redemptions), 1,047,500 Private Placement Shares and 8,625,000 Founder Shares into Post-Combination Company common stock;

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the rollover of SmartRent’s options, warrants, and RSUs into options, warrants, and RSUs in the Post-Combination Company; and

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the issuance of the Post-Combination Company’s shares of common stock as follows: 157,678,300 shares of FWAA Class A common stock to stockholders of SmartRent (on a fully diluted basis) and 15,500,000 to the Subscribers.

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The historical financial information of FWAA was derived from the audited financial statements of FWAA as of December 31, 2020 and for the period from November 23, 2020 (inception) through December 31, 2020, included elsewhere in this proxy statement/prospectus. The historical financial information of SmartRent was derived from the audited consolidated financial statements of SmartRent as of and for the year ended December 31, 2020, included elsewhere in this proxy statement/prospectus. This information should be read together with FWAA and SmartRent’s audited financial statements and related notes, the sections titled “Other Information Related to FWAA — FWAA Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “SmartRent’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other financial information included elsewhere in this proxy statement/prospectus.

 

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The pro forma combined financial statements have been presented for illustrative purposes only and do not necessarily reflect what the Post-Combination Company’s financial condition or results of operations would have been had the Business Combination occurred on the dates indicated. The pro forma combined financial information also may not be useful in predicting the future financial condition and results of operations of the Post-Combination Company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.

Accounting for the Business Combination

The Business Combination will be accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, FWAA, who is the legal acquirer, will be treated as the “acquired” company for financial reporting purposes and SmartRent will be treated as the accounting acquirer. SmartRent has been determined to be the accounting acquirer based on evaluation of the following facts and circumstances under both the no redemption and maximum redemption scenarios:

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SmartRent’s existing stockholders will have more than 70% of the voting interest of the Post-Combination Company under both the no redemption and maximum redemption scenarios;

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SmartRent’s senior management will comprise the senior management of the Post-Combination Company;

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the directors nominated by SmartRent will represent the majority of the board of directors of the Post-Combination Company;

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SmartRent is the larger entity based on historical revenues and business operations;

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SmartRent’s operations will comprise the ongoing operations of the Post-Combination Company.

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The Post-Combination Company will assume SmartRent’s name.

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Accordingly, for accounting purposes, the Business Combination will be treated as the equivalent of a capital transaction in which SmartRent is issuing stock for the net assets of FWAA. The net assets of FWAA will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination will be those of SmartRent.

Basis of Pro Forma Presentation