XML 34 R21.htm IDEA: XBRL DOCUMENT
v3.21.2

Related-Party Transactions | 9 Months Ended
--- | ---
Sep. 30, 2021
Related Party Transactions [Abstract] |
Related Party Transactions | NOTE 15. RELATED-PARTY TRANSACTIONS LL Credit Facilities As of September 30, 2021, we have one senior secured credit facility with a related party, and three mezzanine secured credit facilities, all of which are with a related party. The following summarizes certain details related to these facilities (in thousands):
|  | As of September 30, 2021 |  |  | As of December 31, 2020 |
|  | Borrowing Capacity |  |  | Outstanding Amount |  |  | Borrowing Capacity |  |  | Outstanding Amount |
Senior secured credit facility with a related party |  | $ | 225,000 |  |  | $ | 159,999 |  |  | $ | 225,000 |  |  | $ | 105,397 |
Mezzanine secured credit facilities |  | $ | 124,700 |  |  | $ | 81,209 |  |  | $ | 68,450 |  |  | $ | 19,251 |
Since October 26, 2016, we have been party to a loan and security agreement (the “LL Funds Loan Agreement”), with LL Private Lending Fund, L.P. and LL Private Lending Fund II, L.P., both of which are affiliates of LL Capital Partners I, L.P., which holds more than 5% of our Class A common stock. Additionally, Roberto Sella, who is a member of our board of directors, is the managing partner of LL Funds. The LL Funds Loan Agreement is comprised of a senior secured credit line and a mezzanine secured loan, under which we may borrow loans up to a maximum principal amount of line of $225.0 million and $43.45 million, respectively. Interest accrues on the senior secured credit line and the mezzanine secured credit line at rates of LIBOR + 4.0% and 13.0%, respectively. We paid interest for borrowings under the LL Funds Loan Agreement of $2.6 million and $1.0 million in the three months ended September 30, 2021 and 2020, respectively, and $5.8 million and $6.4 million in the nine months ended September 30, 2021 and 2020, respectively. Since March 16, 2020, we have also been party to a mezzanine loan and security agreement (the “LL Mezz Loan Agreement”), with LL Private Lending Fund II, L.P., which is an affiliate of LL Capital Partners I, L.P., which holds more than 5% of our Class A common stock. Additionally, Roberto Sella, who is a member of our board of directors, is the managing partner of LL Funds. Under the LL Mezz Loan Agreement, we may borrow loans up to a maximum principal amount of line of $31.25 million. Interest ac crues on the mezzanine secured credit line at a rate of 13.0%. We paid interest for borrowings under the LL Mezz Loan Agreement of $0.9 million and $0.1 m illion in the three months ended September 30, 2021 and 2020, respectively, and $1.6 million and $0.3 million in the nine months ended September 30, 2021 and 2020, respectively. Since September 10, 2021, we have been party to a loan and security agreement (the “Loan and Security Agreement”) for which LL Private Lending Fund II L.P is a lender. LL Private Lending Fund II L.P. is an affiliate of LL Capital Partners I, L.P., which holds more than 5% of our Class A common stock. Additionally, Roberto Sella, who is a member of our board of directors, is the managing partner of LL Funds. The Loan and Security Agreement is comprised of (i) a $300.0 million credit facility available over a 24-month term with an accordion feature providing for additional capacity of $100.0 million, which a financial institution is lender to, and (ii) a mezzanine facility of $37.5 million, with an accordion feature providing for an additional capacity of $12.5 million, for which LL Private Lending Fund II L.P. is lender. The mezzanine facility has an interest rate of 13.0% per annum. We paid interest for borrowings under the mezzanine facility of $0.02 million in each of the three and nine months ended September 30, 2021. Commercial Relationship with First American Financial Corporation First American Financial Corporation (“First American”), which holds more than 5% of our Class A common stock, through its subsidiaries is a provider of title insurance and settlement services for real estate transactions and a provider of property data services. Additionally, Kenneth DeGiorgio, who is a member of our board of directors, is the president of First American. We use First American’s services in the ordinary course of its home-buying and home-selling activities. We paid First American $3.2 million and $1.3 million during the three months ended September 30, 2021 and 2020, respectively, and $7.5 million and $5.7 million during the nine months ended September 30, 2021 and 2020, respectively, for its services, inclusive of the fees for property data services. Credit Agreement with First American On June 30, 2021, Offerpad entered into a credit agreement (the “First American Credit Agreement”) with First American Title Insurance Company, which is an affiliate of First American, which holds more than 5% of our Class A common stock. Additionally, Kenneth DeGiorgio, who is a member of our board of directors, is the president of First American. Under the First American Credit Agreement, we borrowed a principal amount of $30.0 million. In August 2021, we amended the First American Credit Agreement to borrow an additional $25.0 million. The largest amount of principal outstanding under the First American Credit Agreement, as amended, was $55.0 million. The loan accrued interest at an annual rate of 12.0%. We used the loan to help continue to fund our ongoing operations through the consummation of the Business Combination. The principal amounts of the loan, together with all accrued but unpaid interest, were repaid in connection with the Closing of the Business Combination. Notes Payable From August 2015 to January 2017, Offerpad issued an aggregate of $1.1 million in notes payable to immediate family members of Brian Bair, Offerpad’s chief executive officer and a member of its board of directors. The notes payable bear interest at a rate of 14.0% per annum, are pre-payable and have no set maturity date. Offerpad paid interest for borrowings under the notes payable of $0.05 million in each of the three months ended September 30, 2021 and 2020, respectively, and $0.13 million in each of the nine months ended September 30, 2021 and 2020, respectively, and no principal. Since 2018, the largest amount of principal outstanding under these notes payable was $1.1 million. The principal amount of each note, together with all accrued but unpaid interest, was repaid in connection with the Closing of the Business Combination. Convertible Preferred Stock Financings In April 2018 and June 2018, Offerpad issued and sold 4,650,874 and 2,325,437 shares, respectively, of its Series B convertible preferred stock to LL Capital Partners I, L.P. for a total purchase price of $45.0 million. Additionally, in April 2018, Offerpad issued and sold 775,146 shares of its Series B convertible preferred stock for a total purchase price of $5.0 million, and issued a warrant to purchase 250,552 shares of its common stock at an exercise price of $6.4504 per share, to an affiliated entity of LL Capital Partners I, L.P. In February 2019 and February 2020, Offerpad issued and sold to First American 3,764,606 and 501,947 shares, respectively, of its Series C convertible preferred stock for a total purchase price of $85.0 million. Compensation of Immediate Family Members of Brian Bair Offerpad employs two of Brian Bair’s brothers, along with Mr. Bair’s sister-in-law. The following details the total compensation paid to Mr. Bair’s brothers and Mr. Bair’s sister-in-law during the three and nine months ended September 30, 2021 and 2020 (in thousands):
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
Mr. Bair’s brother 1 |  | $ | 75 |  |  | $ | 61 |  |  | $ | 484 |  |  | $ | 175 |
Mr. Bair’s brother 2 |  |  | 73 |  |  |  | 56 |  |  |  | 384 |  |  |  | 231 |
Mr. Bair’s sister-in-law |  |  | 34 |  |  |  | 28 |  |  |  | 103 |  |  |  | 86 |
|  | $ | 182 |  |  | $ | 145 |  |  | $ | 971 |  |  | $ | 492 |

X
- References No definition available. + Details
Name: | us-gaap_RelatedPartyTransactionsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39549-107864 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39549-107864 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39549-107864 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -URI http://asc.fasb.org/topic&trid=2122745 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39691-107864 + Details
Name: | us-gaap_RelatedPartyTransactionsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration