Item 1. Condensed Financial Statements
BILANDER ACQUISITION CORP.
UNAUDITED CONDENSED BALANCE
SHEET
SEPTEMBER 30, 2021
Assets:
|
|
|
|
Current assets:
|
|
|
|
Cash
|
|
$
|
844,252
|
|
Prepaid expenses
|
|
|
697,702
|
|
Total current assets
|
|
|
1,541,954
|
|
Investments held in Trust Account
|
|
|
168,520,416
|
|
Total Assets
|
|
$
|
170,062,370
|
|
|
|
|
|
|
Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders’ Deficit:
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts payable
|
|
$
|
29,492
|
|
Accrued expenses
|
|
|
88,150
|
|
Due to related party
|
|
|
222
|
|
Franchise tax payable
|
|
|
129,639
|
|
Total current liabilities
|
|
|
247,503
|
|
Accrued liabilities
|
|
|
793,478
|
|
Deferred underwriting commissions
|
|
|
5,898,059
|
|
Derivative warrant liabilities
|
|
|
8,048,581
|
|
Total Liabilities
|
|
|
14,987,621
|
|
|
|
|
|
|
Commitments and Contingencies (Note 5)
|
|
|
|
|
|
|
|
|
|
Class A common stock subject to possible redemption, $0.0001 par value; 16,851,598 shares at $10.00 per share redemption value
|
|
|
168,515,980
|
|
|
|
|
|
|
Stockholders’ Deficit:
|
|
|
|
|
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding
|
|
|
-
|
|
Class A common stock, $0.0001 par value; 200,000,000 shares authorized; none issued or outstanding (excluding 16,851,598 shares subject to possible redemption)
|
|
|
-
|
|
Class B common stock, $0.000075 par value; 20,000,000 shares authorized; 5,617,199 shares issued and outstanding
|
|
|
421
|
|
Additional paid-in capital
|
|
|
-
|
|
Accumulated deficit
|
|
|
(13,441,652
|
)
|
Total stockholders’ deficit
|
|
|
(13,441,231
|
)
|
Total Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders’ Deficit
|
|
$
|
170,062,370
|
|
The accompanying notes are an integral part
of these unaudited interim condensed financial statements.
BILANDER ACQUISITION
CORP.
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
|
|
For the
three months
ended
September 31,
2021
|
|
|
For the
period from
February 5,
2021
(inception)
through
September 30,
2021
|
|
General and administrative expenses
|
|
$
|
935,927
|
|
|
$
|
946,143
|
|
Franchise tax expenses
|
|
|
50,000
|
|
|
|
129,639
|
|
Loss from operations
|
|
|
(985,927
|
)
|
|
|
(1,075,782
|
)
|
Other income (expenses):
|
|
|
|
|
|
|
|
|
Change in fair value of derivative warrant liabilities
|
|
|
(788,066
|
)
|
|
|
(788,066
|
)
|
Offering costs associated with derivative warrant liabilities
|
|
|
(240,974
|
)
|
|
|
(240,974
|
)
|
Gain from expiration of over-allotment option
|
|
|
16,852
|
|
|
|
16,852
|
|
Income from investments held in Trust Account
|
|
|
4,436
|
|
|
|
4,436
|
|
Total other expenses, net
|
|
|
(1,007,752
|
)
|
|
|
(1,007,752
|
)
|
Net loss
|
|
$
|
(1,993,679
|
)
|
|
$
|
(2,083,534
|
)
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding of Class A common stock, basic and diluted
|
|
|
12,968,855
|
|
|
|
5,142,822
|
|
Basic and diluted net loss per share, Class A common stock
|
|
$
|
(0.11
|
)
|
|
$
|
(0.20
|
)
|
Weighted average shares outstanding of Class B common stock, basic and diluted
|
|
|
5,355,560
|
|
|
|
5,140,998
|
|
Basic and diluted net loss per share, Class B common stock
|
|
$
|
(0.11
|
)
|
|
$
|
(0.20
|
)
|
The accompanying notes are an integral part
of these unaudited interim condensed financial statements.
BILANDER ACQUISITION CORP.
UNAUDITED CONDENSED STATEMENTS
OF CHANGES IN STOCKHOLDERS’ DEFICIT
FOR THE THREE MONTHS
ENDED SEPTEMBER 30, 2021 AND FOR THE PERIOD FROM FEBRUARY 5, 2021
(INCEPTION) THROUGH SEPTEMBER 30, 2021
|
|
Common Stock
|
|
|
Additional
|
|
|
|
|
|
Total
|
|
|
|
Class A
|
|
|
Class B
|
|
|
Paid-In
|
|
|
Accumulated
|
|
|
Stockholders’
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Deficit
|
|
|
Deficit
|
|
Balance - February 5, 2021 (inception)
|
|
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Issuance of Class B common stock to Sponsor
|
|
|
-
|
|
|
|
-
|
|
|
|
5,750,000
|
|
|
|
431
|
|
|
|
24,569
|
|
|
|
-
|
|
|
|
25,000
|
|
Net loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(39,312
|
)
|
|
|
(39,312
|
)
|
Balance - March 31, 2021 (unaudited)
|
|
|
-
|
|
|
|
-
|
|
|
|
5,750,000
|
|
|
|
431
|
|
|
|
24,569
|
|
|
|
(39,312
|
)
|
|
|
(14,312
|
)
|
Net loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(50,543
|
)
|
|
|
(50,543
|
)
|
Balance - June 30, 2021 (unaudited)
|
|
|
-
|
|
|
|
-
|
|
|
|
5,750,000
|
|
|
|
431
|
|
|
|
24,569
|
|
|
|
(89,855
|
)
|
|
|
(64,855
|
)
|
Excess of cash received over fair value of private placement warrants
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,187,286
|
|
|
|
-
|
|
|
|
2,187,286
|
|
Forfeiture of Class B common stock
|
|
|
-
|
|
|
|
-
|
|
|
|
(132,801
|
)
|
|
|
(10
|
)
|
|
|
10
|
|
|
|
-
|
|
|
|
-
|
|
Accretion of Class A common stock subject to possible redemption
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,211,865
|
)
|
|
|
(11,358,118
|
)
|
|
|
(13,569,983
|
)
|
Net loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,993,679
|
)
|
|
|
(1,993,679
|
)
|
Balance - September 30, 2021 (unaudited)
|
|
|
-
|
|
|
$
|
-
|
|
|
|
5,617,199
|
|
|
$
|
421
|
|
|
$
|
-
|
|
|
$
|
(13,441,652
|
)
|
|
$
|
(13,441,231
|
)
|
The accompanying notes are an integral part
of these unaudited interim condensed financial statements.
BILANDER ACQUISITION
CORP.
UNAUDITED CONDENSED STATEMENT
OF CASH FLOWS
FOR THE PERIOD FROM FEBRUARY 5, 2021 (INCEPTION)
THROUGH SEPTEMBER 30, 2021
Cash Flows from Operating Activities:
|
|
|
|
Net loss
|
|
$
|
(2,083,534
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
General and administrative expenses paid by related party under promissory note
|
|
|
216
|
|
Change in fair value of derivative warrant liabilities
|
|
|
788,066
|
|
Gain from expiration of over-allotment option
|
|
|
(16,852
|
)
|
Income from investments held in Trust Account
|
|
|
(4,436
|
)
|
Offering costs associated with derivative warrant liabilities
|
|
|
240,974
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
Prepaid expenses
|
|
|
(697,702
|
)
|
Accounts payable
|
|
|
29,492
|
|
Accrued expenses
|
|
|
18,150
|
|
Due to related party
|
|
|
222
|
|
Franchise tax payable
|
|
|
129,639
|
|
Accrued liabilities
|
|
|
793,478
|
|
Net
cash used in operating activities
|
|
|
(802,287
|
)
|
|
|
|
|
|
Cash
Flows from Investing Activities
|
|
|
|
|
Cash deposited in Trust Account
|
|
|
(168,515,980
|
)
|
Net
cash used in investing activities
|
|
|
(168,515,980
|
)
|
|
|
|
|
|
Cash
Flows from Financing Activities:
|
|
|
|
|
Proceeds from issuance of Class B common stock to Sponsor
|
|
|
25,000
|
|
Proceeds from note payable to related party
|
|
|
100,139
|
|
Repayment of note payable to related party
|
|
|
(100,355
|
)
|
Proceeds received from initial public offering, gross
|
|
|
168,515,980
|
|
Proceeds received from private placement
|
|
|
5,620,320
|
|
Offering costs paid
|
|
|
(3,998,565
|
)
|
Net
cash provided by financing activities
|
|
|
170,162,519
|
|
|
|
|
|
|
Net
increase in cash
|
|
|
844,252
|
|
|
|
|
|
|
Cash - beginning of
the period
|
|
|
-
|
|
Cash - end of the period
|
|
$
|
844,252
|
|
|
|
|
|
|
Supplemental
disclosure of noncash activities:
|
|
|
|
|
Offering costs included in accrued expenses
|
|
$
|
70,000
|
|
Deferred underwriting commissions in connection with the initial public offering
|
|
$
|
5,898,059
|
|
The accompanying notes are an integral part
of these unaudited interim condensed financial statements.
BILANDER
ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS (as restated)
Note 1 - Description of Organization, Business Operations and Basis
of Presentation
Bilander Acquisition Corp. (the “Company”)
is a blank check company incorporated in Delaware on February 5, 2021. The Company was formed for the purpose of effecting a merger, capital
stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses (the “Business
Combination”). The Company is an emerging growth company and, as such, the Company is subject to all of the risks associated with
emerging growth companies.
As of September 30, 2021, the Company had not
commenced any operations. All activity for the period from February 5, 2021 (inception) through September 30, 2021 relates to the Company’s
formation and the initial public offering (the “Initial Public Offering”), described below, and since the Initial Public Offering,
its search for a Business Combination. The Company will not generate any operating revenues until after the completion of its initial
Business Combination, at the earliest. The Company generates non-operating income from the proceeds derived from the Initial Public Offering
and placed in a Trust Account (as defined below) and is subject to non-cash fluctuations in its statement of operations due to changes
in the fair value of its derivative warrant liabilities. The Company has selected December 31 as its fiscal year end.
The Company’s sponsor is Bilander Holdings
LLC, a Delaware limited liability company (the “Sponsor”). The registration statement for the Company’s Initial Public
Offering was declared effective on July 15, 2021. On July 20, 2021, the Company consummated its Initial Public Offering of 15,000,000
units (the “Units” and, with respect to the Class A common stock included in the Units being offered, the “Public Shares”),
at $10.00 per Unit, generating gross proceeds of $150.0 million, and incurring offering costs of approximately $8.9 million, of which
approximately $5.3 million was for deferred underwriting commissions and $218,000 was for offering costs allocated to derivative warrant
liabilities. The Company granted the underwriters a 45-day option to purchase up to an additional 2,250,000 Units at the Initial Public
Offering price to cover over-allotments. On August 9, 2021, the underwriters purchased an additional 1,851,598 Units pursuant to the partial
exercise of the over-allotment option. The over-allotment units were sold at the offering price of $10.00 per Unit, generating additional
gross proceeds to the Company of $18.5 million. The Company incurred additional offering costs of approximately $1.0 million in connection
with the over-allotment, of which approximately $0.6 million was for deferred underwriting commissions.
Simultaneously with the closing of the Initial
Public Offering, the Company consummated a private placement (“Private Placement”) of 3,500,000 warrants (each, a “Private
Placement Warrant” and collectively, the “Private Placement Warrants”) at a price of $1.50 per Private Placement Warrant
to the Sponsor, generating proceeds of approximately $5.3 million (see Note 4). In connection with the partial exercise of the over-allotment
option on August 9, 2021, the Sponsor purchased an additional 246,880 Private Placement Warrants at a purchase price of $1.50 per Private
Placement Warrant, generating additional gross proceeds to the Company of $370,320.
Upon the closing of the Initial Public Offering,
the over-allotment and the Private Placement, $168.5 million ($10.00 per Unit) of the net proceeds of the sale of the Units in the Initial
Public Offering and over-allotment and of the Private Placement Warrants in the Private Placement were placed in a trust account (“Trust
Account”) located in the United States with American Stock Transfer & Trust Company acting as trustee, and invested only in
U.S. “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended (the
“Investment Company Act”), having a maturity of 185 days or less or in money market funds meeting certain conditions under
Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations, as determined
by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account as described
below.
BILANDER
ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS (as restated)
The Company’s management has broad discretion
with respect to the specific application of the net proceeds of the Initial Public Offering, the over-allotment and the sale of Private
Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business
Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete
one or more initial Business Combinations having an aggregate fair market value of at least 80% of the net assets held in the Trust Account
(net of amounts disbursed to management for working capital purposes and excluding the deferred underwriting commissions and taxes payable
on the interest earned on the Trust Account) at the time of the agreement to enter into the initial Business Combination. However, the
Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the voting securities
of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment
company under the Investment Company Act.
The Company will provide the holders of the Company’s
outstanding Public Shares (the “Public Stockholders”) with the opportunity to redeem all or a portion of their Public Shares
upon the completion of a Business Combination either (i) in connection with a stockholders meeting called to approve the Business Combination
or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or
conduct a tender offer will be made by the Company, solely in its discretion. The Public Stockholders will be entitled to redeem their
Public Shares for a pro rata portion of the amount then held in the Trust Account (initially at $10.00 per Public Share, plus any pro
rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). The
per-share amount to be distributed to Public Stockholders who redeem their Public Shares will not be reduced by the deferred underwriting
commissions that the Company will pay to the underwriters (as discussed in Note 5). These Public Shares were recorded at a redemption
value and classified as temporary equity in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting
Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity.” The Company will proceed with
a Business Combination if a majority of the shares voted are voted in favor of the Business Combination. The Company will not redeem the
Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001. If a stockholder vote is not required
by law and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its
Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”), conduct the redemptions pursuant to
the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC
prior to completing a Business Combination. If, however, stockholder approval of the transaction is required by law, or the Company decides
to obtain stockholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation
pursuant to the proxy rules and not pursuant to the tender offer rules. Additionally, each public stockholder may elect to redeem their
Public Shares irrespective of whether they vote for or against the proposed transaction. If the Company seeks stockholder approval in
connection with a Business Combination, the Initial Stockholders (as defined below) agreed to vote their Founder Shares (as defined below
in Note 4) and any Public Shares purchased during or after the Initial Public Offering in favor of a Business Combination. In addition,
the Initial Stockholders agreed to waive their redemption rights with respect to their Founder Shares and Public Shares in connection
with the completion of a Business Combination.
Our Certificate of Incorporation provides that
a Public Stockholder, together with any affiliate of such Public Stockholder or any other person with whom such Public Stockholder is
acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Public Shares,
without the prior consent of the Company.
The Sponsor and any other holders of the Founder
Shares immediately prior to the Initial Public Offering (the “Initial Stockholders”), as well as the Company’s officers
and directors, agreed not to propose an amendment to the Certificate of Incorporation to modify the substance or timing of the Company’s
obligation to redeem 100% of the Public Shares if the Company does not complete a Business Combination within the Combination Period (as
defined below) or with respect to any other material provisions relating to stockholders’ rights or pre-initial Business Combination
activity, unless the Company provides the Public Stockholders with the opportunity to redeem their Public Shares in conjunction with any
such amendment.
BILANDER
ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS (as restated)
If the Company is unable to complete a Business
Combination within 24 months from the closing of the Initial Public Offering, or July 20, 2023, (or 27 months from the closing of the
Initial Public Offering, or October 20, 2023, if the Company has executed a letter of intent, agreement in principle or definitive agreement
for an initial Business Combination within 24 months from the closing of the Initial Public Offering) (the “Combination Period”),
the Company will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than
ten business days thereafter, redeem the Public Shares, at a per share price, payable in cash, equal to the aggregate amount then on deposit
in the Trust Account calculated as of two business days prior to the consummation of the initial Business Combination, including interest
(net of amounts withdrawn to fund our working capital requirements, subject to an annual limit of $500,000, and/or to pay for the Company’s
taxes (“permitted withdrawals”) and up to $100,000 of interest to pay dissolution expenses), divided by the number of then
outstanding Public Shares, which redemption will completely extinguish Public Stockholders’ rights as stockholders (including the
right to receive further liquidating distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible following
such redemption, subject to the approval of the remaining stockholders and the board of directors, dissolve and liquidate, subject in
each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable
law.
The Initial Stockholders agreed to waive their
rights to liquidating distributions from the Trust Account with respect to the Founder Shares if the Company fails to complete a Business
Combination within the Combination Period. However, if the Initial Stockholders acquire Public Shares in or after the Initial Public Offering,
they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if the Company fails to complete
a Business Combination within the Combination Period. The underwriters agreed to waive their rights to the deferred underwriting commission
(see Note 5) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period
and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption
of the Public Shares. In the event of such distribution, it is possible that the per share value of the residual assets remaining available
for distribution (including Trust Account assets) will be only $10.00. In order to protect the amounts held in the Trust Account, the
Sponsor agreed to be liable to the Company if and to the extent any claims by a third party (except for the Company’s independent
registered public accounting firm) for services rendered or products sold to the Company, or a prospective target business with which
the Company has entered into a letter of intent, confidentiality or other similar agreement or business combination agreement (a “Target”),
reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per Public Share and (ii) the actual amount per Public
Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per Public Share due to reductions
in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or Target
that executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will
it apply to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities,
including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). The Company will seek to reduce
the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors,
service providers, prospective target businesses or other entities with which the Company does business, execute agreements with the Company
waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
Emerging Growth Company
The Company is an “emerging growth company,”
as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”),
and it may 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, not being required to comply with the auditor attestation requirements
of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and
proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder
approval of any golden parachute payments not previously approved.
BILANDER
ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS (as restated)
Further, Section 102(b)(1) of the JOBS Act exempts
emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that
is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered
under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging
growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth
companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period
which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an
emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may
make comparison of the Company’s financial statements with another public company that is neither an emerging growth company nor
an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential
differences in accounting standards used.
Liquidity and Capital Resources
As of September 30, 2021, the Company had approximately
$844,000 in its operating bank account and working capital of approximately $1.3 million.
The Company’s liquidity needs prior to the
consummation of the Initial Public Offering were satisfied through the cash contribution of $25,000 from the Sponsor to purchase Founder
Shares (as defined in Note 4), and a loan from the Sponsor of approximately $100,000 under the Note (as defined in Note 4). The Company
repaid the Note in full on July 20, 2021 in connection with the Initial Public Offering, at which time the Note was terminated. Subsequent
to the consummation of the Initial Public Offering, the Company’s liquidity has been satisfied through the net proceeds from the
consummation of the Initial Public Offering, over-allotment and the Private Placement held outside of the Trust Account. In addition,
in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain
of the Company’s officers and directors may, but are not obligated to, provide the Company Working Capital Loans (as defined in
Note 4). As of September 30, 2021, there were no amounts outstanding under any Working Capital Loan.
Management has determined that the Company’s
working capital levels are sufficient to fund the anticipated working capital needs over the next 12 months. Over this time period, the
Company will be using these funds for paying existing accounts payable, identifying and evaluating prospective initial Business Combination
candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to
merge with or acquire, and structuring, negotiating and consummating the Business Combination.
Note 2 - Summary of Significant Accounting
Policies (as restated)
Basis of Presentation
The accompanying unaudited condensed financial
statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“GAAP”)
for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X and pursuant to the rules and
regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP. In the opinion of management,
the unaudited condensed financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the
fair statement of the balances and results for the period presented. Operating results for the three months ended September 30, 2021 and
since inception are not necessarily indicative of the results that may be expected through December 31, 2021 or any future period.
The accompanying unaudited condensed financial
statements should be read in conjunction with the audited financial statements and notes thereto included in the final prospectus and
the Current Report on Form 8-K filed by the Company with the SEC on July 19, 2021 and July 26, 2021, respectively.
BILANDER ACQUISITION
CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS (as restated)
Restatement of Previously Issued Financial Statements
In the Company’s unaudited condensed financial statements for the quarterly
period ended September 30, 2021, the Company concluded it should restate its previously issued financial statements to record derivative
liabilities related to the Company’s grant of the over-allotment option to the underwriters.
The following tables summarize the
effect of the restatement on the unaudited condensed financial statements as of September 30, 2021:
|
|
Loss Per Share
|
|
|
|
As Reported
|
|
|
Adjustment
|
|
|
As Restated
|
|
Three Months Ended September 30, 2021 (unaudited)
|
|
|
|
|
|
|
|
|
|
Gain from expiration of over-allotment option
|
|
$
|
-
|
|
|
$
|
16,852
|
|
|
$
|
16,852
|
|
Net loss
|
|
$
|
(2,010,531
|
)
|
|
$
|
16,852
|
|
|
$
|
(1,993,679
|
)
|
Weighted average shares outstanding - Class A ordinary shares
|
|
|
12,968,855
|
|
|
|
-
|
|
|
|
12,968,855
|
|
Basic and diluted loss per share - Class A ordinary shares
|
|
$
|
(0.11
|
)
|
|
$
|
-
|
|
|
$
|
(0.11
|
)
|
Weighted average shares outstanding - Class B ordinary shares
|
|
|
5,355,560
|
|
|
|
-
|
|
|
|
5,355,560
|
|
Basic and diluted loss per share - Class B ordinary shares
|
|
$
|
(0.11
|
)
|
|
$
|
-
|
|
|
$
|
(0.11
|
)
|
|
|
Loss Per Share
|
|
|
|
As Reported
|
|
|
Adjustment
|
|
|
As Restated
|
|
Nine Months Ended September 30, 2021 (unaudited)
|
|
|
|
|
|
|
|
|
|
Gain from expiration of over-allotment option
|
|
$
|
-
|
|
|
$
|
16,852
|
|
|
$
|
16,852
|
|
Net loss
|
|
$
|
(2,100,386
|
)
|
|
$
|
16,852
|
|
|
$
|
(2,083,534
|
)
|
Weighted average shares outstanding - Class A ordinary shares
|
|
|
5,142,822
|
|
|
|
-
|
|
|
|
5,142,822
|
|
Basic and diluted earnings per share - Class A ordinary shares
|
|
$
|
(0.20
|
)
|
|
$
|
-
|
|
|
$
|
(0.20
|
)
|
Weighted average shares outstanding - Class B ordinary shares
|
|
|
5,140,998
|
|
|
|
-
|
|
|
|
5,140,998
|
|
Basic and diluted earnings per share - Class B ordinary shares
|
|
$
|
(0.20
|
)
|
|
$
|
-
|
|
|
$
|
(0.20
|
)
|
|
|
For the period from
February 5,
2021
(inception) through
September 30,
2021
|
|
|
|
As Reported
|
|
|
Adjustment
|
|
|
As Restated
|
|
Cash Flows from Operating Activities:
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(2,100,386
|
)
|
|
$
|
16,852
|
|
|
$
|
(2,083,534
|
)
|
Gain from expiration of over-allotment option
|
|
$
|
-
|
|
|
$
|
(16,852
|
)
|
|
$
|
(16,852
|
)
|
Net cash used in operating activities
|
|
$
|
(802,287
|
)
|
|
$
|
-
|
|
|
$
|
(802,287
|
)
|
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
$
|
(168,515,980
|
)
|
|
$
|
-
|
|
|
$
|
(168,515,980
|
)
|
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by financing activities
|
|
$
|
170,162,519
|
|
|
$
|
-
|
|
|
$
|
170,162,519
|
|
BILANDER
ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS (as restated)
Use of Estimates
The preparation of financial statements in conformity
with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the
reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate
of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management
considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual
results could differ significantly from those estimates.
Concentration of Credit Risk
Financial instruments that potentially subject
the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the Federal
Deposit Insurance Corporation coverage limit of $250,000. The Company has not experienced losses on these accounts and management believes
the Company is not exposed to significant risks on such accounts.
Cash and Cash Equivalents
The Company considers all short-term investments
with an original maturity of three months or less when purchased to be cash equivalents. As of September 30, 2021, the Company had no
cash equivalents.
BILANDER
ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS (as restated)
Investments Held in the Trust Account
The Company’s portfolio of investments is
comprised of (i) U.S. “government securities,” within the meaning set forth in Section 2(a)(16) of the Investment Company
Act, with a maturity of 185 days or less, or (ii) investments in money market funds meeting certain conditions under Rule 2a-7 promulgated
under the Investment Company Act which invest only in direct U.S. government treasury obligations, as determined by the Company. When
the Company’s investments held in the Trust Account are comprised of U.S. government securities, the investments are classified
as trading securities. When the Company’s investments held in the Trust Account are comprised of money market funds, the investments
are recognized at fair value. Trading securities and investments in money market funds are presented on the balance sheets at fair value
at the end of each reporting period. Gains and losses resulting from the change in fair value of these securities is included in income
on investments held in the Trust Account in the accompanying unaudited condensed statement of operations. The estimated fair values of
investments held in the Trust Account are determined using available market information.
Fair Value of Financial Instruments
The fair value of the Company’s assets and
liabilities which qualify as financial instruments under the FASB ASC 820, “Fair Value Measurement,” equal or approximate
the carrying amounts represented in the balance sheet, primarily due to their short-term nature other than the derivative warrant liabilities
(see Note 6).
Fair Value Measurements
Fair value is defined as the price that would
be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement
date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives
the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the
lowest priority to unobservable inputs (Level 3 measurements). These tiers consist of:
|
●
|
Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;
|
|
●
|
Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
|
|
●
|
Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
|
In some circumstances, the inputs used to measure
fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is
categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.
Derivative Financial
Instruments
The Company does not use derivative instruments
to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all its financial instruments, including issued
Public Warrants (as defined below in Note 3) and Private Placement Warrants, to determine if such instruments are derivatives or contain
features that qualify as embedded derivatives, pursuant to ASC 480 and FASB ASC Topic 815, “Derivatives and Hedging” (“ASC
815”). The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as
equity, is re-assessed at the end of each reporting period. Derivative liabilities related to the warrants will be classified as non-current liabilities as their liquidation is not reasonably expected
to require the use of current assets or require the creation of current liabilities, while the derivative liabilities related to the over-allotment
option given to the underwriters are classified as current liabilities as it is a 45-day option.
The 7,250,000 warrants issued in connection with the Initial Public Offering and the Private Placement (including the 3,750,000 Public
Warrants, as defined in Note 4, included in the Units and the 3,500,000 Private Placement Warrants) were recognized as derivative liabilities
in accordance with ASC 815. Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and adjust the instruments
to fair value at each reporting period. The liabilities are subject to re-measurement at each balance sheet date until exercised. The
fair value of the Public Warrants and the Private Placement Warrants are estimated using Monte Carlo simulation and Black-Scholes option
pricing model, respectively. The determination of the fair value of the warrant liability may be subject to change as more current information
becomes available and accordingly the actual results could differ significantly. Derivative warrant liabilities are classified as non-current
liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities.
The Company granted the underwriters a 45-day option to purchase up to 2,250,000 additional Units solely to cover over-allotments, if
any. The Company estimated the fair value of the over-allotment option using a Black- Scholes model. On August 9, 2021, the underwriters
partially exercised their over-allotment option and subsequently, on August 29, 2021, the over-allotment option expired partially unexercised.
BILANDER
ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS (as restated)
The Public Warrants and the Private Placement
Warrants are recognized as derivative liabilities in accordance with ASC 815. Accordingly, the Company recognizes the warrant instruments
as liabilities at fair value and adjusts the carrying value of the instruments to fair value at each reporting period until they are exercised.
The initial fair value of the Public Warrants issued in connection with the Initial Public Offering were estimated using a Monte Carlo
simulation model. The fair value of the Public Warrants as of September 30, 2021 is based on observable listed prices for such warrants.
The fair value of the Private Placement Warrants as of September 30, 2021 is determined using a Black-Scholes option pricing model. The
determination of the fair value of the warrant liability may be subject to change as more current information becomes available and accordingly
the actual results could differ significantly. Derivative warrant liabilities are classified as non-current liabilities as their liquidation
is not reasonably expected to require the use of current assets or require the creation of current liabilities.
Offering Costs Associated with the Initial
Public Offering and Over-Allotment
Offering costs consisted of legal, accounting,
underwriting fees and other costs incurred through the Initial Public Offering and over-allotment that were directly related to the Initial
Public Offering and over-allotment. Offering costs were allocated to the separable financial instruments issued in the Initial Public
Offering and over-allotment based on a relative fair value basis, compared to total proceeds received. Offering costs associated with
derivative warrant liabilities were expensed as incurred and presented as non-operating expenses in the condensed statements of operations.
Offering costs associated with the Class A common stock issued were charged against the carrying value of the Class A common stock subject
to possible redemption upon the completion of the Initial Public Offering and over-allotment. The Company classifies deferred underwriting
commissions as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or require
the creation of current liabilities.
Class A Common Stock Subject to Possible Redemption
The Company accounts for its Class A common stock
subject to possible redemption in accordance with the guidance in ASC Topic 480. Class A common stock subject to mandatory redemption
(if any) are classified as liability instruments and are measured at fair value. Conditionally redeemable Class A common stock (including
Class A common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the
occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, Class
A common stock are classified as stockholders’ equity. The Company’s Class A common stock features certain redemption rights
that are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly,
16,851,598 shares of Class A common stock subject to possible redemption are presented as temporary equity, outside of the stockholders’
equity section of the Company’s condensed balance sheet.
Effective with the closing of the Initial Public
Offering and the over-allotment option, the Company recognized the accretion from initial book value to redemption amount, which resulted
in charges against additional paid-in capital (to the extent available) and accumulated deficit.
Income Taxes
The Company follows the asset and liability method
of accounting for income taxes under FASB ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for
the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets
and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply
to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances
are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. As of September 30, 2021, a full
valuation allowance of approximately $199,000 was recorded against the deferred tax assets.
BILANDER
ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS (as restated)
FASB ASC 740 prescribes a recognition threshold
and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in
a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing
authorities. There were no unrecognized tax benefits as of September 30, 2021. The Company recognizes accrued interest and penalties related
to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties for the period from
February 5, 2021 (inception) through September 30, 2021. The Company is currently not aware of any issues under review that could result
in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major
taxing authorities since inception.
Net Loss Per Share of Common Stock
The Company complies with accounting and disclosure
requirements of FASB ASC Topic 260, “Earnings Per Share.” The Company has two classes of shares, which are referred to as
Class A common stock and Class B common stock. Income and losses are shared pro rata between the two classes of shares. Net income per
share of common stock is calculated by dividing the net income by the weighted average shares of common stock outstanding for the respective
period.
The calculation of diluted net income (loss) does
not consider the effect of the warrants underlying the Units sold in the Initial Public Offering (including the consummation of the over-allotment)
and the Private Placement Warrants to purchase an aggregate of 7,959,780 shares of Class A common stock in the calculation of diluted
income (loss) per share, because their exercise is contingent upon future events and their inclusion would be anti-dilutive under the
treasury stock method. The Company has considered the effect of Class B common stock that were excluded from the weighted average number
of basic shares outstanding as they were contingent on the exercise of over-allotment option by the underwriters. Though the contingency
was satisfied, the Company had losses for the three months ended September 30, 2021 and for the period from February 5, 2021 (inception)
through September 30, 2021. As such these shares were not included in the weighted average number as their inclusion would be anti-dilutive
under the treasury stock method. Accretion associated with the redeemable Class A common stock is excluded from earnings per share as
the redemption value approximates fair value.
The table below presents a reconciliation of the
numerator and denominator used to compute basic and diluted net loss per share for each class of common stock:
|
|
For the Three Months Ended
September 30,
2021
|
|
|
For the period from
February 5,
2021
(inception) through
September 30,
2021
|
|
|
|
Class A
|
|
|
Class B
|
|
|
Class A
|
|
|
Class B
|
|
Basic and diluted net loss per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
Allocation of net loss
|
|
|
(1,410,999
|
)
|
|
|
(582,680
|
)
|
|
|
(1,041,952
|
)
|
|
|
(1,041,582
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted weighted average common shares outstanding
|
|
|
12,968,855
|
|
|
|
5,355,560
|
|
|
|
5,142,822
|
|
|
|
5,140,998
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per common share
|
|
$
|
(0.11
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
(0.20
|
)
|
BILANDER
ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS (as restated)
Recent Accounting Pronouncements
In August 2020, the FASB issued Accounting Standards
Update (“ASU”) No. 2020-06, “Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts
in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity”
(“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under
current GAAP. The ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative
scope exception, and it simplifies the diluted earnings per share calculation in certain areas. The Company adopted ASU 2020-06 on February
5, 2021 (inception) using the modified retrospective method for transition. Adoption of the ASU 2020-06 did not impact the Company’s
financial position, results of operations or cash flows.
The Company’s management does not believe
that any other recently issued, but not yet effective, accounting standards updates, if currently adopted, would have a material effect
on the accompanying financial statements.
Note 3 - Initial Public Offering
On July 20, 2021, the Company consummated its
Initial Public Offering of 15,000,000 Units, at $10.00 per Unit, generating gross proceeds of $150.0 million, and incurring offering costs
of approximately $8.9 million, of which approximately $5.3 million was for deferred underwriting commissions and $218,000 was for offering
costs allocated to derivative warrant liabilities. On August 9, 2021, the underwriters purchased an additional 1,851,598 Units pursuant
to the partial exercise of the over-allotment option. The over-allotment units were sold at an offering price of $10.00 per Unit, generating
additional gross proceeds to the Company of $18.5 million. The Company incurred additional offering cost of approximately $1.0 million
in connection with the over-allotment, of which approximately $0.6 million was for deferred underwriting commissions.
Each Unit consists of one share of Class A common
stock and one-fourth of one redeemable warrant (each, a “Public Warrant”). Each Public Warrant entitles the holder to purchase
one share of Class A common stock at a price of $11.50 per share, subject to adjustment (see Note 7).
Note 4 - Related Party Transactions
Founder Shares
On February 11, 2021, the Sponsor purchased 4,312,500
shares of the Company’s Class B common stock, par value $0.0001 per share, (the “Founder Shares”) for an aggregate purchase
price of $25,000. In February 2021, the Sponsor transferred 12,500 Founder Shares to each of Messrs. Kirkpatrick, Wagner, Thompson and
Ms. Wellman. On April 30, 2021, the Company effected a 4:3 split of the Founder Shares, resulting in an aggregate of 5,750,000 Founder
Shares, par value $0.000075, 5,683,332 shares of which were held by the Sponsor and 66,668 shares of which were held by the officers and
directors. All share and per share amounts have been retroactively restated. In May 2021, the Company nominated Mr. Janetschek as director
and assigned him 16,667 Founder Shares, which together resulted in the Sponsor holding 5,666,665 Founder Shares and the officers and directors
holding 83,335 Founder Shares. The 83,335 Founder Shares held by the officers and directors would not have been subject to forfeiture
in the event the underwriters’ over-allotment option were not exercised. The Initial Stockholders agreed to forfeit up to 750,000
Founder Shares to the extent that the over-allotment option is not exercised in full by the underwriters, such that the Founder Shares
will represent 25% of the Company’s issued and outstanding shares after the Initial Public Offering. On August 9, 2021, the underwriters
partially exercised the over-allotment option to purchase an additional 1,851,598 Units. Subsequently, the Sponsor forfeited 132,801 shares
of Class B common stock.
The Founder Shares will automatically convert
into Class A common stock after the initial Business Combination (i) when certain triggering events based on our shares of Class A common
stock trading at $12.00, $15.00 and $18.00 per share for any 20 trading days within a 30-trading day period commencing any time after
the completion of the initial Business Combination or (ii) upon specified strategic transactions, in each case prior to the ten year anniversary
of the initial Business Combination, and as further described in the final prospectus filed with the SEC on July 19, 2021.
BILANDER
ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS (as restated)
The Initial Stockholders agreed, subject to limited
exceptions, not to transfer, assign or sell any of the Founder Shares; provided, that any Class A common stock issued upon conversion
of the Founder Shares will not be subject to such restrictions on transfer after one year has passed since the completion of the initial
Business Combination.
Private Placement Warrants
Simultaneously with the closing of the Initial
Public Offering, the Company consummated the Private Placement of 3,500,000 Private Placement Warrants at a price of $1.50 per Private
Placement Warrant to the Sponsor, generating proceeds of approximately $5.3 million. In connection with the exercise of the over-allotment
option on August 9, 2021, the Sponsor purchased an additional 246,880 Private Placement Warrants at a purchase price of $1.50 per Private
Placement Warrant, generating additional gross proceeds to the Company of $370,320.
Each Private Placement Warrant is exercisable
for one whole share of Class A common stock at a price of $11.50 per share. A portion of the proceeds from the sale of the Private Placement
Warrants to the Sponsor was added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not
complete a Business Combination within the Combination Period, the Private Placement Warrants will expire worthless. Except as set forth
below, the Private Placement Warrants will be non-redeemable for cash and exercisable on a cashless basis so long as they are held by
the Sponsor or their permitted transferees.
The Sponsor and the Company’s officers and directors agreed,
subject to limited exceptions, not to transfer, assign or sell any of their Private Placement Warrants until 30 days after the completion
of the initial Business Combination.
Related Party Loans
On February 11, 2021, the Sponsor agreed to loan
the Company an aggregate of up to $350,000 to cover expenses related to the Initial Public Offering pursuant to a promissory note (the
“Note”). This loan was non-interest bearing and payable upon the completion of the Initial Public Offering. The Company borrowed
approximately $100,000 under the Note and it was repaid in full on July 20, 2021. Subsequent to the repayment, the facility was no longer
available to the Company.
In addition, in order to finance transaction costs
in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and
directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company
completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released
to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that
a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital
Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. The Working Capital Loans would either
be repaid upon consummation of a Business Combination or, at the lender’s discretion, up to $1.5 million of such Working Capital
Loans may be convertible into warrants of the post Business Combination entity at a price of $1.50 per warrant. The warrants would be
identical to the Private Placement Warrants. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been
determined and no written agreements exist with respect to such loans. As of September 30, 2021, the Company has an immaterial amount
due to an affiliate of the Sponsor and had no borrowings under the Working Capital Loans.
Consulting Agreement
As contemplated in our Registration Statement,
the Company entered into a Consulting Agreement with Shipyard Advisors, L.P. (“Shipyard”), dated as of August 28, 2021, pursuant
to which Shipyard will provide consulting services in connection with the Company’s search for a target business and completion
of the Company’s initial business combination. The Company will pay Shipyard $1,000,000 per fiscal quarter payable from July 20,
2021 until the earlier of the closing of a Business Combination and July 20, 2023. The payment is deferred until the closing of a Business
Combination or such other date as the parties mutually agree, and either party may terminate this agreement upon thirty (30) days’
prior written notice to the other party. Shipyard is the managing member of the Sponsor. Mr. James H. Greene, Jr. and Mr. Adam H. Clammer
are the managing members of Shipyard Advisors GP, LLC, which is the general partner of Shipyard. As of September 30, 2021, the Company incurred approximately $793,000 in expenses related to this agreement,
which was included in accrued liabilities on the unaudited condensed balance sheet.
BILANDER
ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS (as restated)
Note 5 - Commitments and Contingencies
Forward Purchase Agreements
In connection with the consummation of the Initial
Public Offering, the Company has entered into forward purchase agreements with certain institutional accredited investors (“Forward
Purchasers”) that will provide for the aggregate purchase of at least $50,000,000 of Class A common stock at $10.00 per share, in
a private placement that will close concurrently with the closing of the Business Combination. The Forward Purchasers’ commitments
under the forward purchase agreements are subject to certain conditions described in the prospectus for the Initial Public Offering. The
obligations under the forward purchase agreements will not depend on whether any shares of Class A common stock are redeemed by the Company’s
Public Stockholders. The Forward Purchasers will not receive any Class B common stock or warrants as part of the forward purchase agreements;
these shares will be identical to the shares of Class A common stock included in the Units being sold in the Initial Public Offering,
except that the forward purchase shares will be subject to certain transfer restrictions and have certain registration rights.
Registration and Stockholder Rights
The holders of Founder Shares, Private Placement
Warrants and warrants that may be issued upon conversion of Working Capital Loans (and any shares of common stock issuable upon the exercise
of the Private Placement Warrants or warrants issued upon conversion of the Working Capital Loans and upon conversion of the Founder Shares),
as well as the Forward Purchasers and their permitted transferees, were entitled to registration rights pursuant to a registration and
stockholder rights agreement signed upon the consummation of the Initial Public Offering. These holders will be entitled to certain demand
and “piggyback” registration rights. The Company will bear the expenses incurred in connection with the filing of any such
registration statements.
Underwriting Agreement
The underwriters were entitled to an underwriting
discount of $0.20 per Unit, or $3.4 million in the aggregate, paid upon the closing of the Initial Public Offering (including over-allotment).
An additional fee of $0.35 per Unit, or approximately $5.9 million in the aggregate will be payable to the underwriters for deferred underwriting
commissions. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that
the Company completes a Business Combination, subject to the terms of the underwriting agreement.
Risks and Uncertainties
Management continues to evaluate the impact of
the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the pandemic could have a negative effect
on the Company’s financial position, and the results of its operations and/or search for a target company, the specific impact is
not readily determinable as of the date of the financial statement. The financial statement does not include any adjustments that might
result from the outcome of this uncertainty.
BILANDER
ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS (as restated)
Note 6 - Derivative Warrant Liabilities
As of September 30, 2021, in connection with the
Initial Public Offering and over-allotment, the Company had 4,212,900 Public Warrants and 3,746,880 Private Placement Warrants outstanding.
Public Warrants may only be exercised for a whole
number of shares. No fractional Public Warrants will be issued upon separation of the Units and only whole Public Warrants will trade.
The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination or (b) 12 months
from the closing of the Initial Public Offering; provided in each case that the Company has an effective registration statement under
the Securities Act covering the shares of Class A common stock issuable upon exercise of the Public Warrants and a current prospectus
relating to them is available (or the Company permits holders to exercise their Public Warrants on a cashless basis and such cashless
exercise is exempt from registration under the Securities Act). The Company agreed that as soon as practicable, but in no event later
than 15 business days after the closing of the initial Business Combination, the Company will use its best efforts to file with the SEC
and have an effective registration statement covering the shares of Class A common stock issuable upon exercise of the warrants and to
maintain a current prospectus relating to those shares of Class A common stock until the warrants expire or are redeemed. If a registration
statement covering the Class A common stock issuable upon exercise of the warrants is not effective by the 60th business day after the
closing of the initial Business Combination, warrant holders may, until such time as there is an effective registration statement and
during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless
basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if the Company’s
shares of Class A common stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they
satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option,
require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9)
of the Securities Act and, in the event the Company so elect, it will not be required to file or maintain in effect a registration statement,
and in the event the Company does not so elect, it will use our best efforts to register or qualify the shares under applicable blue sky
laws to the extent an exemption is not available.
The warrants have an exercise price of $11.50
per share, subject to adjustments, and will expire five years after the completion of a Business Combination or earlier upon redemption
or liquidation. In addition, if (x) the Company issues additional shares of Class A common stock or equity-linked securities for capital
raising purposes in connection with the closing of the initial Business Combination at an issue price or effective issue price of less
than $9.20 per share of Class A common stock (with such issue price or effective issue price to be determined in good faith by the board
of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held
by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross
proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of
the initial Business Combination on the date of the consummation of the initial Business Combination (net of redemptions), and (z) the
volume weighted average trading price of Class A common stock during the 20 trading day period starting on the trading day prior to the
day on which the Company consummates its initial Business Combination (such price, the “Market Value”) is below $9.20 per
share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value
and the Newly Issued Price, the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of
the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price will be adjusted (to the
nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.
The Private Placement Warrants are identical to
the Public Warrants, except that the Private Placement Warrants and the shares of Class A common stock issuable upon exercise of the Private
Placement Warrants will not be transferable, assignable or salable until the completion of a Business Combination, subject to certain
limited exceptions. Additionally, except as set forth below, the Private Placement Warrants will be non-redeemable so long as they are
held by the Sponsor or their permitted transferees. If the Private Placement Warrants are held by someone other than the Sponsor or their
permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis
as the Public Warrants.
BILANDER
ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS (as restated)
Redemption of warrants when the price per share
of Class A common stock equals or exceeds $18.00.
Once the warrants become exercisable, the Company
may redeem the outstanding warrants for cash (except as described herein with respect to the Private Placement Warrants):
|
●
|
in whole and not in part;
|
|
●
|
at a price of $0.01 per warrant;
|
|
●
|
upon a minimum of 30 days’ prior written notice of redemption; and
|
|
●
|
if, and only if, the closing price of Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations, and the like) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders (the “Reference Value”).
|
Redemption of warrants when the price per share
of Class A common stock equals or exceeds $10.00.
Once the warrants become exercisable, the Company
may redeem the outstanding warrants (except as described with respect to the Private Placement Warrants):
|
●
|
in whole and not in part;
|
|
●
|
at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to an agreed table based on the redemption date and the fair market value of the Shares of Class A common stock; and
|
|
●
|
if, and only if, the closing price of the Shares of Class A common stock equals or exceeds $10.00 per public share (as adjusted) on the trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.
|
In no event will the Company be required to net
cash settle any warrant. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates
the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they
receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly,
the warrants may expire worthless.
BILANDER
ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS (as restated)
Note 7 - Class A Common Stock Subject
to Possible Redemption
The Company’s Class A common stock features
certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of future events.
The Company is authorized to issue 200,000,000 shares of Class A common stock with a par value of $0.0001 per share. Holders of the Company’s
Class A common stock are entitled to one vote for each share. As of September 30, 2021, there were 16,851,598 Class A common stock outstanding,
all of which were subject to possible redemption.
The Class A common stock subject to possible redemption
reflected on the condensed balance sheet is reconciled on the following table:
Gross proceeds
|
|
$
|
168,515,980
|
|
Less:
|
|
|
|
|
Fair value of Public Warrants at issuance
|
|
|
(3,827,481
|
)
|
Gain from expiration of over-allotment option
|
|
|
(16,852
|
)
|
Offering costs allocated to Class A common stock subject to possible redemption
|
|
|
(9,725,650
|
)
|
Plus:
|
|
|
|
|
Accretion on Class A common stock subject to possible redemption amount
|
|
|
13,569,983
|
|
Class A common stock subject to possible redemption
|
|
$
|
168,515,980
|
|
BILANDER
ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS (as restated)
Note 8 - Stockholders’ Deficit
Preferred Stock - The Company is
authorized to issue 1,000,000 shares of preferred stock, par value $0.0001 per share, with such designations, voting and other rights
and preferences as may be determined from time to time by the Company’s board of directors. As of September 30, 2021, there were
no shares of preferred stock issued or outstanding.
Class A Common Stock - The Company
is authorized to issue 200,000,000 shares of Class A common stock with a par value of $0.0001 per share. As of September 30, 2021, there
were 16,851,598 shares of Class A common stock issued and outstanding, which were all subject to possible redemption and have been classified
as temporary equity (see Note 7).
Class B Common Stock - The Company
is authorized to issue 20,000,000 shares of Class B common stock with a par value of $0.000075 per share. As of April 30, 2021, the Company
had 5,750,000 shares of Class B common stock issued and outstanding, which amounts have been adjusted to reflect the stock split as discussed
in Note 4. Subsequent to the partial exercise of the over-allotment option, the Sponsor forfeited 132,801 shares of Class B common stock.
Accordingly, as of September 30, 2021, 5,617,199 shares of Class B common stock were issued and outstanding with no shares subject to
forfeiture.
Common stockholders of record are entitled to
one vote for each share held on all matters to be voted on by stockholders. Holders of Class B common stock will have the right to elect
all of the Company’s directors prior to the consummation of the initial Business Combination. On any other matter submitted to a
vote of the Company’s stockholders, holders of Class B common stock and holders of Class A common stock will vote together as a
single class, except as required by applicable law or stock exchange rule.
The shares of Class B common stock, divided into
three tranches equal to 40%, 40% and 20% of the shares of Class B common stock outstanding upon the completion of this offering, will
automatically convert into shares of Class A common stock on a one-for-one basis (subject to adjustment as provided herein) after our
initial Business Combination when the triggering event corresponding to each such tranche based on the shares trading at $12.00, $15.00
or $18.00 per share for any 20 trading days within a 30-trading day period occurs prior to the ten year anniversary of our initial Business
Combination. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess
of the amounts sold in the Initial Public Offering and related to the closing of the initial Business Combination, the ratio at which
shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of
the outstanding shares of Class B common stock agree to waive such anti-dilution adjustment with respect to any such issuance or deemed
issuance) so that the number of shares of Class A common stock issuable upon conversion of each tranche of Class B common stock will equal,
in the aggregate, on an as-converted basis, at a “conversion ratio” of 10%, 10% or 5% (based on varying price triggers as
discussed in more detail below) of the total number of all shares of common stock outstanding upon completion of the Initial Public Offering
plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection with the initial Business Combination
(including the forward purchase shares), excluding any shares or equity-linked securities issued, or to be issued, to any seller in the
initial Business Combination in consideration for such seller’s interest in the Business Combination target and any Private Placement
Warrants issued upon the conversion of Working Capital Loans made to the Company.
BILANDER
ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS (as restated)
Note 9 - Fair Value Measurements
The following tables present information about
the Company’s assets that are measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation
techniques that the Company utilized to determine such fair value.
Description
|
|
Quoted Prices in
Active Markets
(Level 1)
|
|
|
Significant Other
Observable Inputs
(Level 2)
|
|
|
Significant
Other Unobservable Inputs
(Level 3)
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
Investments held in Trust Account - U.S. Treasury Securities
|
|
$
|
168,520,416
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative warrant liabilities - Public Warrants
|
|
$
|
4,212,900
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Derivative warrant liabilities - Private Warrants
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
3,835,681
|
|
Transfers to/from Levels 1, 2 and 3 are recognized
at the beginning of the reporting period. The estimated fair value of Public Warrants was transferred from a Level 3 measurement to a
Level 1 measurement, when the Public Warrants were separately listed and traded in an active market in September 2021. There were no other
transfers to/from Levels 1, 2, and 3 during the three months ended September 30, 2021 and for the period from February 5, 2021 (inception)
through September 30, 2021.
Level 1 assets include investments in U.S. government
securities. The Company uses inputs such as actual trade data, quoted market prices from dealers or brokers, and other similar sources
to determine the fair value of its investments.
For periods where no observable traded price is
available, the fair value of the Public Warrants has been estimated using a Monte Carlo simulation and the Private Placement Warrants
have been estimated using Black-Scholes option pricing model. For periods subsequent to the detachment of the Public Warrants from the
Units, the fair value of the Public Warrants is based on the observable listed price for such warrants and the fair value of the Private
Placement Warrants continue to be estimated using the Black-Scholes option pricing model. For the three months ended September 30, 2021
and for the period from February 5, 2021 (inception) through September 30, 2021, the Company recognized loss on the unaudited condensed
statements of operations resulting from an increase in the fair value of liabilities of approximately $0.8 million presented as change
in fair value of derivative warrant liabilities on the accompanying unaudited condensed statements of operations.
The estimated fair value of the Public Warrants
and Private Placement Warrants, prior to the Public Warrants being traded in an active market, was determined using Level 3 inputs. Inherent
in a Monte Carlo simulation and a Black-Scholes option pricing model are assumptions related to expected stock-price volatility, expected
life, risk-free interest rate, and dividend yield. The Company estimates the volatility of its warrants based on implied volatility from
the Company’s traded warrants and from historical volatility of select peer companies’ common stock that match the expected
remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for
a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their
remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates remaining at zero.
BILANDER
ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS (as restated)
The following table provides quantitative information
regarding Level 3 fair value measurements input at their measurement dates:
|
|
At
initial
issuances
|
|
|
As of
September 30,
2021
|
|
Exercise price
|
|
$11.50
|
|
|
$11.50
|
|
Stock price
|
|
$9.61 - $9.86
|
|
|
$9.68
|
|
Volatility
|
|
10.0% - 20.0%
|
|
|
10% - 16.2%
|
|
Term (years)
|
|
6.00 - 5.97
|
|
|
5.00
|
|
Risk-free rate
|
|
0.84% - 0.94%
|
|
|
1.13%
|
|
Dividend yield
|
|
0.0%
|
|
|
0.0%
|
|
The change in the fair value of the derivative
liabilities, measured using Level 3 inputs, for the period from February 5, 2021 (inception) through September 30, 2021, is summarized
as follows:
Derivative liabilities at February 5, 2021
(inception)
|
|
$
|
-
|
|
Issuance of Public and Private Warrants
|
|
|
7,260,515
|
|
Over-allotment option
|
|
|
95,175
|
|
Transfer of Public Warrants to Level 1
|
|
|
(3,827,481
|
)
|
Exercise of over-allotment option
|
|
|
(78,323
|
)
|
Gain from expiration of over-allotment option
|
|
|
(16,852
|
)
|
Change in fair value of derivative warrant liabilities
|
|
|
402,647
|
|
Derivative liabilities at September
30, 2021 (unaudited)
|
|
$
|
3,835,681
|
|
Note 10 - Subsequent Events
The Company evaluated
subsequent events and transactions that occurred up to the date condensed financial statements were issued. Based upon this review,
except for the effects of the restatement in Note 2, the Company did not identify any subsequent events that would have required
adjustment to or disclosure in the condensed financial statements.
Item 2. Management’s Discussion and Analysis
of Financial Condition and Results of Operations.
References to the “Company,” “Bilander
Acquisition Corp.,” “our,” “us” or “we” refer to Bilander Acquisition Corp. The following discussion
and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited interim
condensed financial statements and the notes thereto contained elsewhere in this report. Certain information contained in the discussion
and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q includes
forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”),
and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We have based these forward-looking
statements on our current expectations and projections about future events. These forward-looking statements are subject to known and
unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements
to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking
statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,”
“could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,”
“continue,” or the negative of such terms or other similar expressions. For information identifying important factors that
could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors
section of the Company’s final prospectus for its Initial Public Offering filed with the U.S. Securities and Exchange Commission
(the “SEC”). The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov.
Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking
statements whether as a result of new information, future events or otherwise.
Overview
We are a blank check company incorporated in Delaware
on February 5, 2021. We were formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase,
reorganization or similar business combination with one or more businesses (the “Business Combination”). We are an emerging
growth company and, as such, we are subject to all of the risks associated with emerging growth companies.
As of September 30, 2021, we had not commenced
any operations. All activity for the period from February 5, 2021 (inception) through September 30, 2021 relates to our formation and
the initial public offering (the “Initial Public Offering”), described below and subsequent to the Initial Public Offering,
the search for a Business Combination target. We will not generate any operating revenues until after the completion of the initial Business
Combination, at the earliest. We will generate non-operating income in the form of interest income from the proceeds derived from the
Initial Public Offering. We have selected December 31 as our fiscal year end.
Our sponsor is Bilander Holdings LLC, a Delaware
limited liability company (the “Sponsor”). The registration statement for our Initial Public Offering was declared effective
on July 15, 2021 (the “Registration Statement”). On July 20, 2021, we consummated our Initial Public Offering of 15,000,000
units (the “Units” and, with respect to the Class A common stock included in the Units being offered, the “Public Shares”),
at $10.00 per Unit, generating gross proceeds of $150.0 million, and incurring offering costs of approximately $8.9 million, of which
approximately $5.3 million was for deferred underwriting commissions and $218,000 was for offering costs allocated to derivative warrant
liabilities. We granted the underwriter a 45-day option to purchase up to an additional 2,250,000 Units at the Initial Public Offering
price to cover over-allotments, if any. On August 9, 2021, the underwriters purchased an additional 1,851,598 Units pursuant to the partial
exercise of the over-allotment option. The over-allotment units were sold at an offering price of $10.00 per Unit, generating additional
gross proceeds of $18.5 million. We incurred additional offering cost of approximately $1.0 million in connection with the over-allotment,
of which approximately $0.6 million was for deferred underwriting commissions.
Simultaneously with the closing of the Initial
Public Offering, we consummated the private placement (“Private Placement”) of 3,500,000 warrants (each, a “Private
Placement Warrant” and collectively, the “Private Placement Warrants”) at a price of $1.50 per Private Placement Warrant
to the Sponsor, generating proceeds of approximately $5.3 million (see Note 4). In connection with the exercise of the over-allotment
option on August 9, 2021, the Sponsor purchased an additional 246,880 Private Placement Warrants at a purchase price of $1.50 per Private
Placement Warrant, generating additional gross proceeds of $370,320.
Upon the closing of the Initial Public Offering,
over-allotment and the Private Placement, $168.5 million ($10.00 per Unit) of the net proceeds of the sale of the Units in the Initial
Public Offering, over-allotment and of the Private Placement Warrants in the Private Placement were placed in a trust account (“Trust
Account”) located in the United States with American Stock Transfer & Trust Company acting as trustee, and invested only in
U.S. “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended (the
“Investment Company Act”), having a maturity of 185 days or less or in money market funds meeting certain conditions under
Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations, as determined
by us, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account as described
below.
Liquidity and Capital Resources
At September 30, 2021, we had operating cash of
$844,000 and working capital of approximately $1.3 million.
Our liquidity needs up to September 30, 2021 had
been satisfied through the cash receipt of $25,000 from the Sponsor to purchase Founder Shares (as defined in Note 4), and loan from the
Sponsor of approximately $100,000 under the Note (as defined in Note 4). We repaid the Note in full on July 20, 2021. Subsequent to the
consummation of the Initial Public Offering, our liquidity has been satisfied through the net proceeds from the consummation of the Initial
Public Offering, over-allotment and the Private Placement held outside of the Trust Account. In addition, in order to finance transaction
costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of our officers and directors
may, but are not obligated to, provide us Working Capital Loans (as defined in Note 4). As of September 30, 2021, the Company has an immaterial
amount due to an affiliate of the Sponsor and there were no amounts outstanding under any Working Capital Loan.
Management has determined that the Company has
access to funds from the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors to meet its
needs through the earlier of the consummation of a Business Combination or one year from this filing. Over this time period, the Company
will be using these funds for paying existing accounts payable, identifying and evaluating prospective initial Business Combination candidates,
performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with
or acquire, and structuring, negotiating and consummating the Business Combination.
Our management continues to evaluate the impact
of the COVID-19 pandemic and has concluded that the specific impact is not readily determinable as of the date of the financial statements.
The unaudited condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Results of Operations
Our entire activity since inception up to September
30, 2021 was in preparation for our Initial Public Offering and since the Initial Public Offering, our search for prospective Business
Combination. We will not generate any operating revenues until the closing and completion of our initial Business Combination. We generate
non-operating income in the form of investment income from our investments held in the Trust Account. We expect to incur increased expenses
as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence
expenses.
For the three months ended September 30, 2021,
we had a net loss of approximately $2.0 million, which consisted of approximately $936,000 in general and administrative expenses, $50,000
in franchise tax expenses, a non-cash loss of approximately $788,000 for the change in fair value of derivative warrant liabilities, approximately
$241,000 in offering costs associated with derivative warrant liabilities, partially offset by approximately $4,000 of income from investments
held in the Trust Account.
For the period from February 5, 2021 (inception)
through September 30, 2021, we had a net loss of approximately $2.1 million, which consisted of approximately $946,000 in general and
administrative expenses, approximately $130,000 in franchise tax expenses, a non-cash loss of approximately $788,000 for a change in fair
value of derivative liabilities, approximately $241,000 in offering costs associated with derivative warrant liabilities, partially offset
by approximately $4,000 of income from investments held in the Trust Account.
Contractual Obligations
Registration Rights
The holders of Founder Shares, Private Placement
Warrants and warrants that may be issued upon conversion of Working Capital Loans (and any shares of common stock issuable upon the exercise
of the Private Placement Warrants or warrants issued upon conversion of the Working Capital Loans and upon conversion of the Founder Shares),
as well as the Forward Purchasers and their permitted transferees, were entitled to registration rights pursuant to a registration and
stockholder rights agreement signed upon the consummation of the Initial Public Offering. These holders will be entitled to certain demand
and “piggyback” registration rights. We will bear the expenses incurred in connection with the filing of any such registration
statements.
Underwriting Agreement
The underwriters were entitled to an underwriting
discount of $0.20 per Unit, or $3.4 million in the aggregate, paid upon the closing of the Initial Public Offering (including over-allotment).
In addition, the underwriters will be entitled to a deferred fee of $0.35 per Unit, or $5.9 million in the aggregate. The deferred fee
will become payable to the underwriters from the amounts held in the Trust Account solely in the event that we complete a Business Combination,
subject to the terms of the underwriting agreement.
Critical Accounting Policies
Derivative Financial Instruments
We do not use derivative instruments to hedge
exposures to cash flow, market, or foreign currency risks. We evaluate all of our financial instruments, including issued Public Warrant
and Private Placement Warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives,
pursuant to ASC 480 and FASB ASC Topic 815, “Derivatives and Hedging” (“ASC 815”). The classification of derivative
instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting
period.
The Public Warrants and the Private Placement
Warrants are recognized as derivative liabilities in accordance with ASC 815. Accordingly, we recognize the warrant instruments as liabilities
at fair value and adjust the carrying value of the instruments to fair value at each reporting period until they are exercised. The initial
fair value of the Public Warrants issued in connection with the Initial Public Offering were estimated using a Monte Carlo simulation
model. The fair value of the Public Warrants as of September 30, 2021 is based on observable listed prices for such warrants. The fair
value of the Private Placement Warrants as of September 30, 2021 is determined using a Black-Scholes option pricing model. The determination
of the fair value of the warrant liability may be subject to change as more current information becomes available and accordingly the
actual results could differ significantly. Derivative warrant liabilities are classified as non-current liabilities as their liquidation
is not reasonably expected to require the use of current assets or require the creation of current liabilities.
We granted the underwriters a 45-day option to purchase up to 2,250,000 additional Units solely to cover over-allotments, if any. We estimated
the fair value of the over-allotment option using a Black-Scholes model. On August 9, 2021, the underwriters partially exercised their
over-allotment option and subsequently, on August 29, 2021, the over-allotment option expired partially unexercised.
Offering Costs Associated with the Initial
Public Offering and Over-Allotment
Offering costs consisted of legal, accounting,
underwriting fees and other costs incurred through the Initial Public Offering and over-allotment that were directly related to the Initial
Public Offering and over-allotment. Offering costs were allocated to the separable financial instruments issued in the Initial Public
Offering and over-allotment based on a relative fair value basis, compared to total proceeds received. Offering costs associated with
derivative warrant liabilities were expensed as incurred and presented as non-operating expenses in the condensed statements of operations.
Offering costs associated with the Class A common stock issued were charged against the carrying value of the Class A common stock subject
to possible redemption upon the completion of the Initial Public Offering and over-allotment. We classify deferred underwriting commissions
as non-current liabilities because their liquidation is not reasonably expected to require the use of current assets or require the creation
of current liabilities.
Class A Common Stock Subject to Possible Redemption
We account for our Class A common stock subject
to possible redemption in accordance with the guidance in ASC Topic 480. Class A common stock subject to mandatory redemption (if any)
are classified as liability instruments and are measured at fair value. Conditionally redeemable Class A common stock (including Class
A common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence
of uncertain events not solely within our control) is classified as temporary equity. At all other times, Class A common stock are classified
as stockholders’ equity. Our Class A common stock features certain redemption rights that are considered to be outside of our control
and subject to the occurrence of uncertain future events. Accordingly, 16,851,598 shares of Class A common stock subject to possible redemption
are presented as temporary equity, outside of the stockholders’ equity section of our condensed balance sheet.
Effective with the closing of the Initial Public
Offering and the over-allotment option, we recognized the accretion from initial book value to redemption amount, which resulted in charges
against additional paid-in capital (to the extent available) and accumulated deficit.
Net Loss Per Share of Common Stock
We comply with accounting and disclosure requirements
of FASB ASC Topic 260, “Earnings Per Share.” We have two classes of shares, which are referred to as Class A common stock
and Class B common stock. Income and losses are shared pro rata between the two classes of shares. Net income per share of common stock
is calculated by dividing the net income by the weighted average shares of common stock outstanding for the respective period.
The calculation of diluted net income (loss) does
not consider the effect of the warrants underlying the Units sold in the Initial Public Offering (including the consummation of the over-allotment)
and the Private Placement Warrants to purchase an aggregate of 7,959,780 shares of Class A common stock in the calculation of diluted
income (loss) per share, because their exercise is contingent upon future events and their inclusion would be anti-dilutive under the
treasury stock method. We have considered the effect of Class B common stock that were excluded from the weighted average number of basic
shares outstanding as they were contingent on the exercise of over-allotment option by the underwriters. Since the contingency was satisfied,
we have included these shares in the weighted average number as of the beginning of the interim period to determine the dilutive impact
of these shares. Accretion associated with the redeemable Class A common stock is excluded from earnings per share as the redemption value
approximates fair value.
Recent Accounting Pronouncements
In August 2020, the FASB issued Accounting Standards
Update (“ASU”) No. 2020-06, “Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts
in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity”
(“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under
current GAAP. The ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative
scope exception, and it simplifies the diluted earnings per share calculation in certain areas. We adopted ASU 2020-06 on February 5,
2021 (inception) using the modified retrospective method for transition. Adoption of the ASU 2020-06 did not impact our financial position,
results of operations or cash flows.
Our management does not believe that any other
recently issued, but not yet effective, accounting standards updates, if currently adopted, would have a material effect on the accompanying
financial statements.
Off-Balance Sheet Arrangements
As of September 30, 2021, we did not have any
off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.
JOBS Act
The JOBS Act contains provisions that, among other
things, relax certain reporting requirements for qualifying public companies. We qualify as an “emerging growth company” and
under the JOBS Act are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly
traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with
new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies.
As a result, the financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as
of public company effective dates.
Additionally, we are in the process of evaluating
the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth
in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among
other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to
Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank
Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory
audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements
(auditor discussion and analysis) and (iv) disclose certain executive compensation related items such as the correlation between executive
compensation and performance and comparisons of the CEO’s compensation to median employee compensation. These exemptions will apply
for a period of five years following the completion of our Initial Public Offering or until we are no longer an “emerging growth
company,” whichever is earlier.