Condensed Financial Information of Registrant

12 Months Ended

Dec. 31, 2021

Schedule I: Condensed Financial Information of Registrant

Schedule I: Condensed Financial Information of Registrant

Schedule I: Condensed Financial Information of Registrant

Porch Group, Inc.
Condensed Balance Sheets
(Parent Company Only)
(all numbers in thousands, except share amounts)

	December 31,
	2021		2020
Assets
Investment in subsidiary	$	661,619	$	189,097
Total assets	$	661,619	$	189,097
Liabilities and Stockholders’ Equity
Current liabilities
Accrued expenses and other current liabilities		930		—
Total current liabilities		930		—
Long-term debt		414,585		—
Earnout liability, at fair value1		13,866		50,238
Private warrant liability, at fair value2		15,193		31,534
Total liabilities		444,574		81,772
Commitments and contingencies
Stockholders’ equity
Common stock, $0.0001 par value:		10		8
Authorized shares – 400,000,000 and 400,000,000, respectively
Issued and outstanding shares – 97,961,597 and 81,669,151, respectively
Additional paid-in capital		641,406		424,823
Accumulated other comprehensive loss		(259)		—
Accumulated deficit		(424,112)		(317,506)
Total stockholders’ equity		217,045		107,325
Total liabilities and stockholders’ equity	$	661,619	$	189,097

¹ – See Note 4 (Fair Value) and Note 9 (Stock-Based Compensation) in the notes to the accompanying consolidated financial statements included in Item 8 of this Annual Report.

² - See Note 4 (Fair Value) and Note 8 (Equity and Warrants) in the notes to the accompanying consolidated financial statements included in Item 8 of this Annual Report.

See notes to condensed financial statements.

Porch Group, Inc.
Condensed Statements of Comprehensive Loss
(Parent Company Only)
(all numbers in thousands)

			For the period from
	Year ended		December 23, 2020
	December 31, 2021		to December 31, 2020
Operating expenses:
General and administrative	$	4,079	$	56
Operating loss		(4,079)		(56)
Other income (expense):
Interest expense		(1,573)		—
Change in fair value of earnout liability1		(18,519)		—
Change in fair value of private warrant liability1		(15,389)		2,427
Equity in net income (loss) of subsidiary		(67,046)		1,360
Total other income (expense)		(102,527)		3,787
Loss before income taxes		(106,606)		3,731
Income tax benefit (expense)		—		—
Net loss attributable to Porch Group, Inc.	$	(106,606)	$	3,731
Other comprehensive loss		(259)		—
Comprehensive loss attributable to Porch Group, Inc.	$	(106,865)	$	3,731

¹ – See Note 4 (Fair Value) to the accompanying consolidated financial statements included in Item 8 of this Annual Report.

.

See notes to condensed financial statements.

Porch Group, Inc.
Condensed Statements of Cash Flows
(Parent Company Only)
(all numbers in thousands)

			For the period from
	Year ended		December 23, 2020
	December 31, 2021		to December 31, 2020
Cash flows from operating activities:
Net (loss) income	$	(106,606)	$	3,731
Adjustments to reconcile net loss to net cash used in operating activities
Equity in net loss of subsidiary		67,046		(1,360)
Loss (gain) on remeasurement of private warrant liability		15,389		(2,427)
Loss on remeasurement of earnout liability		18,519		—
Interest expense (non-cash)		643		—
Change in operating assets and liabilities, net of acquisitions and divestitures
Accrued expenses and other current liabilities		930		—
Net cash used in operating activities		(4,079)		(56)
Cash flows from investing activities:
Investment in subsidiary		(458,697)		(269,425)
Net cash used in investing activities		(458,697)		(269,425)
Cash flows from financing activities:
Proceeds from recapitalization and PIPE financing		—		305,133
Distribution to stockholders		—		(30,000)
Transaction costs - recapitalization		—		(5,652)
Proceeds from debt issuance, net of fees		413,537		—
Capped call transactions		(52,913)		—
Proceeds from exercises of warrants		126,741		—
Proceeds from exercises of stock options and Legacy Porch warrants		4,288		—
Income tax withholdings paid upon vesting of restricted stock units		(28,877)		—
Net cash provided by financing activities		462,776		269,481
Net change in cash, cash equivalents, and restricted cash	$	—	$	—
Cash, cash equivalents, and restricted cash, beginning of period	$	—	$	—
Cash, cash equivalents, and restricted cash end of period	$	—	$	—

See notes to condensed financial statements.

Porch Group, Inc.
Notes to Condensed Financial Statements
(Parent Company Only)

Basis of Presentation

The accompanying condensed financial statements of Porch Group, Inc. (referred to in this section as the “Parent Company”) should be read in conjunction with the consolidated financial statements and notes thereto included in this Annual Report on Form 10-K. These condensed Parent Company only financial statements have been prepared using the same accounting principles and policies described in the notes to the accompanying consolidated financial statements included in Item 8 of this Annual Report, with the only exception being that the Parent Company accounts for investments in its subsidiaries using the equity method.

Porch Group, Inc. became the Parent Company as a result of the Merger in December 2020. See Note 1 (Description of Business and Summary of Significant Accounting Policies) to the accompanying consolidated financial statements included in Item 8 of this Annual Report for additional information on the Merger included in the consolidated financial statements elsewhere in this Annual Report. As a result, these Parent Company only financial statements reflect the periods following this Merger event.

Long-term Debt

The information relating to long-term debt and interest expense relates to our convertible senior notes and is described in Note 7 – Debt in the notes to the accompanying consolidated financial statements. Accrued expenses and other current liabilities include accrued interest on our convertible senior notes.

Condensed Statements of Comprehensive Loss

On the condensed statements of comprehensive loss, other comprehensive loss represents activity of Porch.com, Inc. and includes net unrealized gains on available-for-sale securities.

Condensed Statements of Cash Flows

The Parent Company does not hold any cash but has access to funds maintained in Porch.com, Inc. to meet its holding company obligation.

Commitments and contingencies

See Note 16 to the accompanying consolidated financial statements included in Item 8 of this Annual Report for information regarding pending and threatened litigation.

Income Taxes

The Parent Company’s financial statements recognize the current and deferred income tax consequences that result from its activities pursuant to the provisions of ASC 740 as if it were a separate taxpayer rather than a member of the Parent Company’s consolidated income tax group. No income tax benefit is recognized for its net operating loss and other deferred tax assets because realization of these future deductions does not meet the more likely than not standard such that they are subject to a full valuation allowance.