NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note
1 — Description of Organization, Business Operations and Basis of Presentation
Bilander
Acquisition Corp. (the “Company”) is a blank check company incorporated in Delaware on February 5, 2021. The Company was
formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business
combination with one or more businesses (the “Business Combination”). The Company is an emerging growth company and, as such,
the Company is subject to all of the risks associated with emerging growth companies.
As
of June 30, 2021, the Company had not commenced any operations. All activity for the period from February 5, 2021 (inception)
through June 30, 2021 relates to the Company’s formation and the initial public offering
(the “Initial Public Offering”), described below. The Company will not generate any operating revenues until
after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the
form of interest income on cash and cash equivalents from the proceeds derived from the Initial Public Offering and placed in Trust Account (as defined below) and will be 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 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. 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.
Simultaneously
with the closing of the Initial Public Offering, the Company 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 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, 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
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.
Liquidity
and Capital Resources
As
of June 30, 2021, the Company had $25,000 in its operating bank account and working capital deficit of approximately $569,000.
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 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 June 30, 2021, there were no amounts outstanding under any Working Capital
Loan.
BILANDER ACQUISITION
CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Based
on the foregoing, management believes that the Company will have sufficient working capital and borrowing capacity to meet its needs
through the earlier of the consummation of a Business Combination or one year from this filing. Over this time period, the Company will
be using the funds held outside of the Trust Account for paying existing accounts payable, identifying and evaluating prospective initial
Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting
the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination.
Note
2 — Summary of Significant Accounting Policies
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 and six months ended June 30, 2021 are not necessarily indicative of the results that may be expected through December
31, 2021.
The
accompanying unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes thereto
included in the final prospectus and the Current Report on Form 8-K filed by the Company with the SEC on July 19, 2021 and July 26, 2021,
respectively.
Use
of Estimates
The
preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of income and expenses during the reporting period. Making estimates requires management to exercise significant judgment.
It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at
the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one
or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
Concentration
of Credit Risk
Financial
instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution,
which, at times, may exceed the Federal Deposit Insurance Corporation coverage limit of $250,000. The Company has not experienced losses
on these accounts and management believes the Company is not exposed to significant risks on such accounts.
Cash
and Cash Equivalents
The
Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.
As of June 30, 2021, the Company had no cash equivalents.
Financial
Instruments
The
fair value of the Company’s assets and liabilities which qualify as financial instruments under the FASB ASC 820, “Fair Value
Measurements and Disclosures,” equal or approximate the carrying amounts represented in the balance sheet primarily due to their
short-term nature.
BILANDER ACQUISITION
CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Fair
Value Measurements
Fair
value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction
between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs
used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets
or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers consist of:
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Level
1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;
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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
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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.
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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.
Deferred
Offering Costs
The
Company complies with the requirements of Financial Accounting Standards Board (FASB) Accounting Standard Codification (ASC) 340-10-S99-1. Deferred
offering costs consist of legal, accounting, underwriting fees and other costs incurred through the balance sheet date that were directly
related to the Initial Public Offering. Offering costs are allocated to the separable financial instruments issued in the Initial Public
Offering based on a relative fair value basis, compared to total proceeds received. Offering costs allocated to derivative warrant liabilities
are expensed as incurred, presented as non-operating expenses in the statement of operations. Offering costs associated with the Initial
Public Offering are charged to stockholders’ equity upon the completion of the Initial Public Offering.
Net
Loss Per Share
The
Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” Net loss per share
is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period, excluding shares
of common stock subject to forfeiture. Weighted average shares at June 30, 2021 were reduced for the effect of an aggregate of 750,000 shares
of Class B common stock that are subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters
(see Note 4). At June 30, 2021, the Company did not have any dilutive securities and other contracts that could, potentially, be
exercised or converted into shares of common stock and then share in the earnings of the Company. As a result, diluted loss per share
is the same as basic loss per share for the period presented.
Income
Taxes
The
Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes.” Deferred
tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial
statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to
be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period
that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected
to be realized. Deferred tax assets were deemed de minimis as of June 30, 2021.
FASB
ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax
positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than
not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of June 30, 2021. The Company
recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the
payment of interest and penalties for the period from February 5, 2021 (inception) through June 30, 2021. The Company is currently not
aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company
is subject to income tax examinations by major taxing authorities since inception.
BILANDER ACQUISITION
CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Recent
Accounting Pronouncements
In
August 2020, the FASB issued Accounting Standards Update (“ASU”) No. 2020-06, “Debt—Debt with Conversion and
Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting
for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”), which simplifies accounting
for convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement
conditions that are required for equity-linked contracts to qualify for the derivative scope exception, and it simplifies the diluted
earnings per share calculation in certain areas. The Company adopted ASU 2020-06 on February 5, 2021 (inception) using the modified retrospective
method for transition. Adoption of the ASU 2020-06 did not impact the Company’s financial position, results of operations or cash
flows.
The
Company’s management does not believe that any other recently issued, but not yet effective, accounting standards updates, if currently
adopted, would have a material effect on the accompanying financial statements.
Note
3 — Initial Public Offering
On
July 20, 2021, the Company consummated its Initial Public Offering of 15,000,000 Units, at $10.00 per Unit, generating gross proceeds
of $150.0 million, and incurring offering costs of approximately $8.9 million, of which approximately $5.3 million was for deferred underwriting
commissions and $218,000 was for offering costs allocated to derivative warrant liabilities. On August 9, 2021, the underwriters purchased
an additional 1,851,598 Units pursuant to the partial exercise of the over-allotment option. The over-allotment units were sold at an
offering price of $10.00 per Unit, generating additional gross proceeds to the Company of $18.5 million. The Company incurred additional
offering cost of approximately $1.0 million in connection with the over-allotment, of which approximately $0.6 million was for deferred
underwriting commissions.
Each
Unit consists of one share of Class A common stock and one-fourth of one redeemable warrant (each, a “Public Warrant”). Each
Public Warrant entitles the holder to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment
(see Note 7).
Note
4 — Related Party Transactions
Founder
Shares
On
February 11, 2021, the Sponsor purchased 4,312,500 shares of the Company’s Class B common stock, par value $0.0001 per share, (the
“Founder Shares”) for an aggregate purchase price of $25,000. In February 2021, the Sponsor transferred 12,500 Founder Shares
to each of Messrs. Kirkpatrick, Wagner, Thompson and Ms. Wellman. On April 30, 2021, the Company effected a 4:3 split of the Founder
Shares, resulting in an aggregate of 5,750,000 Founder Shares, par value $0.000075, 5,683,332 shares of which were held by the Sponsor
and 66,668 shares of which were held by the officers and directors. 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.
BILANDER ACQUISITION
CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Private
Placement Warrants
Simultaneously
with the closing of the Initial Public Offering, the Company consummated the Private Placement of 3,500,000 Private Placement Warrants
at a price of $1.50 per Private Placement Warrant to the Sponsor, generating proceeds of approximately $5.3 million. In connection with
the exercise of the over-allotment option on August 9, 2021, the Sponsor purchased an additional 246,880 Private Placement Warrants at
a purchase price of $1.50 per Private Placement Warrant, generating additional gross proceeds to the Company of $370,320.
Each
Private Placement Warrant is exercisable for one whole share of Class A common stock at a price of $11.50 per share. A portion of the
proceeds from the sale of the Private Placement Warrants to the Sponsor was added to the proceeds from the Initial Public Offering held
in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the Private Placement Warrants
will expire worthless. Except as set forth below, the Private Placement Warrants will be non-redeemable for cash and exercisable on a
cashless basis so long as they are held by the Sponsor or their permitted transferees.
The
Sponsor and the Company’s officers and directors agreed, subject to limited exceptions, not to transfer, assign or sell any of
their Private Placement Warrants until 30 days after the completion of the initial Business Combination.
Related
Party Loans
On
February 11, 2021, the Sponsor agreed to loan the Company an aggregate of up to $350,000 to cover expenses related to the Initial Public
Offering pursuant to a promissory note (the “Note”). This loan was non-interest bearing and payable upon the completion of
the Initial Public Offering. The Company borrowed approximately $100,000 under the Note and it was repaid in full on July
20, 2021. Subsequent to the repayment, the facility was no longer available to the Company.
In
addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor,
or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working
Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the
proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside
the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the
Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital
Loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination or, at the lender’s discretion,
up to $1.5 million of such Working Capital Loans may be convertible into warrants of the post Business Combination entity at a price
of $1.50 per warrant. The warrants would be identical to the Private Placement Warrants. Except for the foregoing, the terms of such
Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. As of July 20, 2021,
the Company had no borrowings under the Working Capital Loans.
Consulting Agreement
As contemplated in our Registration Statement, we 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 our search for a target business
and completion of our initial business combination. We 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. Shipyard is the managing member of our 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.
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
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.
BILANDER ACQUISITION
CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL 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.
Note
6 — Stockholders’ Equity
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 June 30, 2021, there were no shares of preferred stock issued or outstanding.
Class
A Common Stock — The Company is authorized to issue 200,000,000 shares of Class A common stock with a par value of $0.0001
per share. As of June 30, 2021, there were no shares of Class A common stock issued or outstanding.
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 June 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.
Common
stockholders of record are entitled to one vote for each share held on all matters to be voted on by stockholders. Holders of Class B
common stock will have the right to elect all of the Company’s directors prior to the consummation of the initial Business Combination.
On any other matter submitted to a vote of the Company’s stockholders, holders of Class B common stock and holders of Class A common
stock will vote together as a single class, except as required by applicable law or stock exchange rule.
The
shares of Class B common stock, divided into three tranches equal to 40%, 40% and 20% of the shares of Class B common stock outstanding
upon the completion of this offering, will automatically convert into shares of Class A common stock on a one-for-one basis (subject
to adjustment as provided herein) after our initial Business Combination when the triggering event corresponding to each such tranche
based on the shares trading at $12.00, $15.00 or $18.00 per share for any 20 trading days within a 30-trading day period occurs prior
to the ten year anniversary of our initial Business Combination. In the case that additional shares of Class A common stock, or equity-linked
securities, are issued or deemed issued in excess of the amounts sold in the Initial Public Offering and related to the closing of the
initial Business Combination, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will
be adjusted (unless the holders of a majority of the outstanding shares of Class B common stock agree to waive such anti-dilution adjustment
with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of
each tranche of Class B common stock will equal, in the aggregate, on an as-converted basis, at a “conversion ratio” of 10%,
10% or 5% (based on varying price triggers as discussed in more detail below) of the total number of all shares of common stock outstanding
upon completion of the Initial Public Offering plus all shares of Class A common stock and equity-linked securities issued or deemed
issued in connection with the initial Business Combination (including the forward purchase shares), excluding any shares or equity-linked
securities issued, or to be issued, to any seller in the initial Business Combination in consideration for such seller’s interest
in the Business Combination target and any Private Placement Warrants issued upon the conversion of Working Capital Loans made to the
Company.
BILANDER ACQUISITION
CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note
7 — Derivative Warrant Liabilities
As
of June 30, 2021, there were no warrants outstanding. In connection with the Initial Public Offering
and subsequent over-allotment, the Company has 4,212,900 Public Warrants and 3,746,880 Private Placement Warrants outstanding.
Public
Warrants may only be exercised for a whole number of shares. No fractional Public Warrants will be issued upon separation of the Units
and only whole Public Warrants will trade. The Public Warrants will become exercisable on the later of (a) 30 days after the completion
of a Business Combination or (b) 12 months from the closing of the Initial Public Offering; provided in each case that the Company has
an effective registration statement under the Securities Act covering the shares of Class A common stock issuable upon exercise of the
Public Warrants and a current prospectus relating to them is available (or the Company permits holders to exercise their Public Warrants
on a cashless basis and such cashless exercise is exempt from registration under the Securities Act). The Company agreed that as soon
as practicable, but in no event later than 15 business days after the closing of the initial Business Combination, the Company will use
its best efforts to file with the SEC and have an effective registration statement covering the shares of Class A common stock issuable
upon exercise of the warrants and to maintain a current prospectus relating to those shares of Class A common stock until the warrants
expire or are redeemed. If a registration statement covering the Class A common stock issuable upon exercise of the warrants is not effective
by the 60th business day after the closing of the initial Business Combination, warrant holders may, until such time as there is an effective
registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise
warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding
the above, if the Company’s shares of Class A common stock are at the time of any exercise of a warrant not listed on a national
securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities
Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis”
in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elect, it will not be required to file or maintain
in effect a registration statement, and in the event the Company does not so elect, it will use our best efforts to register or qualify
the shares under applicable blue sky laws to the extent an exemption is not available.
The
warrants have an exercise price of $11.50 per share, subject to adjustments, and will expire five years after the completion of a Business
Combination or earlier upon redemption or liquidation. In addition, if (x) the Company issues additional shares of Class A common stock
or equity-linked securities for capital raising purposes in connection with the closing of the initial Business Combination at an issue
price or effective issue price of less than $9.20 per share of Class A common stock (with such issue price or effective issue price to
be determined in good faith by the board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without
taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly
Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and
interest thereon, available for the funding of the initial Business Combination on the date of the consummation of the initial Business
Combination (net of redemptions), and (z) the volume weighted average trading price of Class A common stock during the 20 trading day
period starting on the trading day prior to the day on which the Company consummates its initial Business Combination (such price, the
“Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be
equal to 115% of the higher of the Market Value and the Newly Issued Price, the $18.00 per share redemption trigger price will be adjusted
(to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption
trigger price will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.
The
Private Placement Warrants are identical to the Public Warrants, except that the Private Placement Warrants and the shares of Class A
common stock issuable upon exercise of the Private Placement Warrants will not be transferable, assignable or salable until the completion
of a Business Combination, subject to certain limited exceptions. Additionally, except as set forth below, the Private Placement Warrants
will be non-redeemable so long as they are held by the Sponsor or their permitted transferees. If the Private Placement Warrants are
held by someone other than the Sponsor or their permitted transferees, the Private Placement Warrants will be redeemable by the Company
and exercisable by such holders on the same basis as the Public Warrants.
BILANDER ACQUISITION
CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
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):
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●
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in
whole and not in part;
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●
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at
a price of $0.01 per warrant;
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|
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●
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upon
a minimum of 30 days’ prior written notice of redemption; and
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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”).
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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):
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●
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in
whole and not in part;
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●
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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
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●
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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.
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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
8 — Subsequent Events
The
Company evaluated subsequent events and transactions that occurred up to the date unaudited condensed financial statements were issued.
Based upon this review, except as noted above regarding the initial public offering, the Company did not identify any subsequent events
that would have required adjustment to or disclosure in the financial statements.
As contemplated in our Registration Statement, we 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 our search for a target business
and completion of our initial business combination. We will pay Shipyard $1,000,000 per fiscal quarter payable from July 20, 2021 until
the earlier of the closing of the 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. Shipyard is the managing member of our 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.