Item 1. Condensed Financial Statements
BILANDER ACQUISITION CORP.
CONDENSED BALANCE SHEETS
| |
March 31,
2022 | | |
December 31,
2021 | |
| |
(Unaudited) | | |
| |
Assets: | |
| | |
| |
Current assets: | |
| | |
| |
Cash | |
$ | 527,327 | | |
$ | 722,633 | |
Prepaid expenses | |
| 537,149 | | |
| 586,960 | |
Total current assets | |
| 1,064,476 | | |
| 1,309,593 | |
Investments held in Trust Account | |
| 168,519,226 | | |
| 168,530,964 | |
Total Assets | |
$ | 169,583,702 | | |
$ | 169,840,557 | |
| |
| | | |
| | |
Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders’ Deficit: | |
| | | |
| | |
Current liabilities: | |
| | | |
| | |
Accounts payable | |
$ | 35,760 | | |
$ | - | |
Accrued expenses | |
| 85,000 | | |
| 76,000 | |
Due to related party | |
| 12,624 | | |
| 5,380 | |
Franchise tax payable | |
| 50,050 | | |
| 96,358 | |
Total current liabilities | |
| 183,434 | | |
| 177,738 | |
Accrued liabilities | |
| 2,793,478 | | |
| 1,793,478 | |
Deferred underwriting commissions | |
| 5,898,059 | | |
| 5,898,059 | |
Derivative warrant liabilities | |
| 4,001,997 | | |
| 7,374,236 | |
Total Liabilities | |
| 12,876,968 | | |
| 15,243,511 | |
| |
| | | |
| | |
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 at March 31, 2022 and December 31, 2021 | |
| 168,515,980 | | |
| 168,515,980 | |
| |
| | | |
| | |
Stockholders’ Deficit: | |
| | | |
| | |
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding at March 31, 2022 and December 31, 2021 | |
| - | | |
| - | |
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) at March 31, 2022 and December 31, 2021 | |
| - | | |
| - | |
Class B common stock, $0.000075 par value; 20,000,000 shares authorized; 5,617,199 shares issued and outstanding at March 31, 2022 and December 31, 2021 | |
| 421 | | |
| 421 | |
Additional paid-in capital | |
| - | | |
| - | |
Accumulated deficit | |
| (11,809,667 | ) | |
| (13,919,355 | ) |
Total stockholders’ deficit | |
| (11,809,246 | ) | |
| (13,918,934 | ) |
Total Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders’ Deficit | |
$ | 169,583,702 | | |
$ | 169,840,557 | |
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
March 31,
2022 | | |
For the
period from
February 5,
2021
(inception)
through
March 31,
2021 | |
General and administrative expenses | |
$ | 1,222,938 | | |
$ | 9,673 | |
Franchise tax expenses | |
| 50,050 | | |
| 29,639 | |
Loss from operations | |
| (1,272,988 | ) | |
| (39,312 | ) |
Other income: | |
| | | |
| | |
Change in fair value of derivative warrant liabilities | |
| 3,372,239 | | |
| - | |
Income from investments held in Trust Account | |
| 10,437 | | |
| - | |
Total other income | |
| 3,382,676 | | |
| - | |
Net income (loss) | |
$ | 2,109,688 | | |
$ | (39,312 | ) |
| |
| | | |
| | |
Weighted average shares outstanding of Class A common stock, basic and diluted | |
| 16,851,598 | | |
| - | |
Basic and diluted net income per share, Class A common stock | |
$ | 0.09 | | |
$ | - | |
Weighted average shares outstanding of Class B common stock, basic and diluted | |
| 5,617,199 | | |
| 4,454,545 | |
Basic and diluted net income (loss) per share, Class B common stock | |
$ | 0.09 | | |
$ | (0.01 | ) |
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 MARCH 31, 2022
| |
Common Stock | | |
Additional | | |
| | |
Total | |
| |
Class A | | |
Class B | | |
Paid-In | | |
Accumulated | | |
Stockholders’ | |
| |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Deficit | |
Balance - December 31, 2021 | |
| - | | |
$ | - | | |
| 5,617,199 | | |
$ | 421 | | |
$ | - | | |
$ | (13,919,355 | ) | |
$ | (13,918,934 | ) |
Net income | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 2,109,688 | | |
| 2,109,688 | |
Balance - March 31, 2022 (Unaudited) | |
| - | | |
$ | - | | |
| 5,617,199 | | |
$ | 421 | | |
$ | - | | |
$ | (11,809,667 | ) | |
$ | (11,809,246 | ) |
FOR THE PERIOD FROM FEBRUARY 5, 2021 (INCEPTION)
THROUGH MARCH 31, 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 (1)(2) | |
| - | | |
| - | | |
| 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 | ) |
| (1) | This
number includes up to 750,000 shares of Class B common stock subject to forfeiture if the over-allotment option is not exercised in full
or in part by the underwriters. 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 (see Notes 4 and 7). |
| | |
| (2) | On
April 30, 2021, the Company effected a 4:3 split of the Class B common stock, resulting in an aggregate of 5,750,000 shares of Class
B common stock. All shares and associated amounts have been retroactively restated to reflect the stock split (see Note 4 and 7). |
The accompanying notes are an integral part
of these unaudited interim condensed financial statements.
BILANDER ACQUISITION CORP.
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
| |
For the
three months
ended
March 31,
2022 | | |
For the
period from
February 5,
2021
(inception)
through
March 31,
2021 | |
Cash Flows from Operating Activities: | |
| | |
| |
Net income (loss) | |
$ | 2,109,688 | | |
$ | (39,312 | ) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | |
| | | |
| | |
General and administrative expenses paid by related party under promissory note | |
| - | | |
| 56 | |
Change in fair value of derivative warrant liabilities | |
| (3,372,239 | ) | |
| - | |
Income from investments held in Trust Account | |
| (10,437 | ) | |
| - | |
Changes in operating assets and liabilities: | |
| | | |
| | |
Prepaid expenses | |
| 49,811 | | |
| - | |
Accounts payable | |
| 35,760 | | |
| 3,617 | |
Accrued expenses | |
| 9,000 | | |
| 6,000 | |
Due to related party | |
| 7,244 | | |
| - | |
Franchise tax payable | |
| (46,308 | ) | |
| 29,639 | |
Accrued liabilities | |
| 1,000,000 | | |
| - | |
Net cash used in operating activities | |
| (217,481 | ) | |
| - | |
| |
| | | |
| | |
Cash Flows from Investing Activities | |
| | | |
| | |
Interest released from Trust Account | |
| 22,175 | | |
| - | |
Net cash provided by investing activities | |
| 22,175 | | |
| - | |
| |
| | | |
| | |
Cash Flows from Financing Activities: | |
| | | |
| | |
Proceeds from issuance of Class B common stock to Sponsor | |
| - | | |
| 25,000 | |
Proceeds from note payable to related party | |
| - | | |
| 50,195 | |
Offering costs paid | |
| - | | |
| (50,195 | ) |
Net cash provided by financing activities | |
| - | | |
| 25,000 | |
| |
| | | |
| | |
Net change in cash | |
| (195,306 | ) | |
| 25,000 | |
| |
| | | |
| | |
Cash - beginning of the period | |
| 722,633 | | |
| - | |
Cash - end of the period | |
$ | 527,327 | | |
$ | 25,000 | |
| |
| | | |
| | |
Supplemental disclosure of noncash activities: | |
| | | |
| | |
Offering costs included in accounts payable | |
$ | - | | |
$ | 35,175 | |
Offering costs included in accrued expenses | |
$ | - | | |
$ | 284,000 | |
The accompanying notes are an integral part
of these unaudited interim condensed financial statements.
BILANDER ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 1 - Description of Organization and Business
Operations
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 March 31, 2022, the Company had not commenced
any operations. All activity for the period from February 5, 2021 (inception) through March 31, 2022 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.
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.
BILANDER ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
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.
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.
BILANDER ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
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.
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.
BILANDER ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Liquidity
and Capital Resources
As
of March 31, 2022, the Company had approximately $527,000 in its operating bank account and working capital of approximately $0.9 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 March 31, 2022 and December 31, 2021, there were no amounts outstanding
under any Working Capital Loan.
In
connection with management’s assessment of going concern considerations in accordance with FASB ASC Topic 205-40 “Presentation
of Financial Statements - Going Concern,” as of March 31, 2022, the Company will have sufficient liquidity to meet its obligations
for the next twelve months from the date of issuance of these condensed financial statements. The Company has determined that the Company
may need access to funds from the Sponsor after that to fund the working capital needs until the earlier of the consummation of an Initial
Business Combination or a minimum one year from the date of issuance of these condensed financial statements following this filing.
Note
2 – Basis of Presentation and Summary of Significant Accounting Policies
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 March 31, 2022 and since inception are not necessarily indicative of the results that may be expected
through December 31, 2022, 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 Annual Report on Form 10-K filed by the Company with the SEC on March 31, 2022.
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.
The
Company’s valuation of its Public and Private Placement Warrants requires significant management estimates and judgments and is
further described below.
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.
BILANDER ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
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 March 31, 2022 and December 31, 2021, the Company had no cash equivalents.
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
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.
BILANDER ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
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.
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 March 31, 2022
and December 31, 2021, is based on observable listed prices for such warrants. The fair value of the Private Placement Warrants as of
March 31, 2022 and December 31, 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.
BILANDER ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The
Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of the Class A ordinary shares
subject to possible redemption to equal the redemption value at the end of each reporting period. This method would view the end of the
reporting period as if it were also the redemption date for the security. 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 complies with the accounting and reporting requirements of FASB ASC 740, “Income Taxes,” which requires an asset
and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed
for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible
amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income.
Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
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. The Company recognizes accrued interest and penalties related to unrecognized
tax benefits as income tax expense.
Net
Income (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 period from February 5, 2021 (inception)
through March 31, 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 March 31, 2022 | | |
For the Period from February 5, 2021 (inception) through March 31, 2021 | |
| |
Class A | | |
Class B | | |
Class A | | |
Class B | |
Numerator: | |
| | |
| | |
| | |
| |
Allocation of net income (loss) | |
$ | 1,582,266 | | |
$ | 527,422 | | |
$ | - | | |
$ | (39,312 | ) |
| |
| | | |
| | | |
| | | |
| | |
Denominator: | |
| | | |
| | | |
| | | |
| | |
Basic and diluted weighted average common stock outstanding | |
| 16,851,598 | | |
| 5,617,199 | | |
| - | | |
| 4,454,545 | |
| |
| | | |
| | | |
| | | |
| | |
Basic and diluted net income (loss) per common stock | |
$ | 0.09 | | |
$ | 0.09 | | |
$ | - | | |
$ | (0.01 | ) |
BILANDER ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Recent
Accounting Pronouncements
The
Company’s management does not believe that any 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.
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.
BILANDER ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
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 March 31, 2022
and December 31, 2021, the Company has an immaterial amount due to an affiliate of the Sponsor and had no borrowings under the Working
Capital Loans.
Due
to Related Party
An
affiliate of the Company paid general and administrative expenses on behalf of the Company. An aggregate of $12,624 and $5,380, as reflected
in the accompanying condensed balance sheets is outstanding as of March 31, 2022 and December 31, 2021, respectively. These amounts are
due on demand and are non-interest bearing.
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 March 31, 2022 and December 31, 2021, the Company incurred approximately $2,793,000 and approximately $1,793,000,
respectively, in expenses related to this agreement, which was included in accrued liabilities on the unaudited condensed balance sheets.
BILANDER ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
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.
In
February 2022, the Russian Federation and Belarus commenced a military action with the country of Ukraine. As a result of this action,
various nations, including the United States, have instituted economic sanctions against the Russian Federation and Belarus. Further,
the impact of this action and related sanctions on the world economy are not determinable as of the date of these financial statements
and the specific impact on the Company’s financial condition, results of operations, and cash flows is also not determinable as of the
date of these financial statements.
Note
6 - Derivative Warrant Liabilities
As
of March 31, 2022 and December 31, 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.
BILANDER ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
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.
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”). |
BILANDER ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
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.
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 March
31, 2022 and December 31, 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 | ) |
Fair value of over-allotment option liabilities | |
| (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 | |
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 March
31, 2022 and December 31, 2021, there were no shares of preferred stock issued or outstanding.
BILANDER ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
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 March 31, 2022 and December 31, 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 March 31, 2022 and December 31, 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.
Note
9 - Fair Value Measurements
The
following tables present information about the Company’s assets and liabilities 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.
March 31, 2022 |
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 | |
$ | 168,519,226 | | |
$ | - | | |
$ | - | |
| |
| | | |
| | | |
| | |
Liabilities: | |
| | | |
| | | |
| | |
Derivative warrant liabilities - Public Warrants | |
$ | 2,106,450 | | |
$ | - | | |
$ | - | |
Derivative warrant liabilities - Private Warrants | |
$ | - | | |
$ | - | | |
$ | 1,895,547 | |
BILANDER ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
December 31, 2021 | |
| |
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 | |
$ | 168,530,964 | | |
$ | - | | |
$ | - | |
| |
| | | |
| | | |
| | |
Liabilities: | |
| | | |
| | | |
| | |
Derivative warrant liabilities - Public Warrants | |
$ | 3,875,025 | | |
$ | - | | |
$ | - | |
Derivative warrant liabilities - Private Warrants | |
$ | - | | |
$ | - | | |
$ | 3,499,211 | |
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 transfers to/from Levels 1, 2, and 3 during the three months ended March 31, 2022.
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 March 31, 2022, the Company recognized gain on the unaudited condensed statements of operations resulting from an increase
in the fair value of liabilities of approximately $3.4 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.
The
following table provides quantitative information regarding Level 3 fair value measurements input at their measurement dates:
|
|
As
of
March 31, 2022 |
|
|
As
of
December 31, 2021 |
|
Exercise
price |
|
$11.50 |
|
|
$11.50 |
|
Stock
price |
|
$9.67 |
|
|
$9.73 |
|
Volatility |
|
5% - 7.5% |
|
|
5% - 15.2% |
|
Term
(years) |
|
5.65 |
|
|
5.78 |
|
Risk-free
rate |
|
2.41% |
|
|
1.33% |
|
Dividend
yield |
|
0.0% |
|
|
0.0% |
|
The
change in the fair value of the derivative liabilities, measured using Level 3 inputs, for the three months ended March 31, 2022, is
summarized as follows:
Derivative liabilities at December 31, 2021 | |
$ | 3,499,211 | |
Change in fair value of derivative warrant liabilities | |
| (1,603,664 | ) |
Derivative liabilities at March 31, 2022 (unaudited) | |
$ | 1,895,547 | |
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, 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 March 31, 2022, we had not commenced any operations. All activity for the period from February 5, 2021 (inception) through March 31,
2022 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 and
approximately $23,000 of the offering costs was allocated to derivative warrant liabilities.
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
March 31, 2022, we had operating cash of approximately $527,000 and working capital of approximately $0.9 million.
Our
liquidity needs up to March 31, 2022 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 March 31, 2022, 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 need through the earlier 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 March 31, 2022 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 March 31, 2022, we had a net income of approximately $2.1 million, which consisted of a non-cash gain of approximately
$3,372,000 for the change in fair value of derivative warrant liabilities, approximately $10,000 of income from investments held in the
Trust Account, which was offset by approximately $1,223,000 in general and administrative expenses and approximately $50,000 in franchise
tax expenses.
For
the period from February 5, 2021 (inception) through March 31, 2021, we had a net loss of approximately $39,000, which consisted of general
and administrative expenses.
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 March 31, 2022 and December
31, 2021, is based on observable listed prices for such warrants. The fair value of the Private Placement Warrants as of March 31, 2022
and December 31, 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.
We
recognize changes in redemption value immediately as they occur and adjusts the carrying value of the Class A ordinary shares subject
to possible redemption to equal the redemption value at the end of each reporting period. This method would view the end of the reporting
period as if it were also the redemption date for the security. 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
Income (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
Our
management does not believe that any 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 March 31, 2022, 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.