Table of Contents
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
FORM 10-Q/A
Amendment No.1
 
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2021
OR
 
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                to                
 
TB SA ACQUISITION CORP
(Exact name of registrant as specified in its charter)
 
Cayman Islands
 
001-40260
 
N/A
(State or other jurisdiction of
of incorporation or organization)
 
(Commission
File Number)
 
(I.R.S. Employer
Identification No.)
PO Box 1093, Boundary Hall
Cricket Square
Grand Cayman, Cayman Islands
 
KYKY1-1102
1-1102
(Address of principal executive offices)
 
(Zip Code)
(345) 814-5771
Registrant’s telephone number, including area code
Not Applicable
(Former name or former address, if changed since last report)
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
 
Trading Symbol(s)
Symbol(s)
 
Name of each exchange
on which registered
Units, each consisting of one Class A ordinary share, $0.0001 par value, and
and one-third
of
one redeemable warrant to acquire one Class A ordinary share
 
TBSAU
 
The NASDAQ Stock Market LLC
Class A ordinary shares included as part of the units
 
TBSA
 
The NASDAQ Stock Market LLC
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Redeemable warrants, each warrant exercisable for one Class A ordinary share, each at an exercise price of $11.50 per share
 
TBSAW
 
The NASDAQ Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes ☒    No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T (§232.405
232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes ☒    No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer
,a non-accelerated filer,
smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in
Rule 12b-2 of
the Exchange Act.
 
Large accelerated filer ☐  Accelerated filer ☐
    
Non-accelerated
filer		 ☒  Smaller reporting company ☒
    
Emerging growth company ☒     
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of
the Exchange Act).    Yes  ☒    No  ☐
As of August 2July
31
4
, 2021, 2022, 
20,000,000 Class A ordinary shares, par value $0.0001 per share (including 18,550,05120,000,000 Class A ordinary shares subject to possible redemption that are classified as temporary equity), and 5,000,000 Class B ordinary shares, par value $0.0001 per share, were issued and outstanding, respectively.
 
 
 
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EXPLANATORY NOTE
TB SA Acquisition Corp. (the “Company,” “we,” “us” or “our”) is filing this Amendment No. 1 to its Quarterly Report on
Form 10-Q
for the quarterly period ended June 30, 2021 (this “Quarterly Report”) to amend and restate certain terms in its Quarterly Report on
Form 10-Q
for the quarterly period ended June 30, 2021 originally filed with the Securities and Exchange Commission (the “SEC”) on August 24, 2021 (the “Original Quarterly Report”) should no longer be relied upon due to the vesting terms of the Company’s Security Assignment Agreement with directors that were not properly evaluated and recorded.
Background of Restatement
On March 12, 2021, the Company’s Sponsor transferred a total of 195,000 shares of Class B ordinary shares of the Company to various individuals at a price of $0.0035 per share. Gareth Penny received 100,000 shares, James Crawley received 35,000, Thando Mhlambiso received 30,000, and Ziyanda Ntshona received 30,000 shares, for a total of 195,000 Class B ordinary shares. Within each agreement that was executed with each individual, vesting provisions were defined for the transferred shares. Summarized, the provisions stated that on the date of the Company’s IPO, twenty-five percent of the total transferred shares would vest, with an additional twenty-five percent vesting one year after the Company’s IPO date. The final fifty percent vests on the date the Company consummates its business combination.
The Company has
re-evaluated
the Company’s application of the Financial Accounting Standards Board Accounting Standards Codification (“ASC”) 718, “Compensation—Stock Compensation,” and notes that the transfer of the Class B Ordinary shares is in the scope of ASC 718. Under ASC 718, stock-based compensation associated with equity-classified awards is measured at fair value upon the grant date. The Founders Shares were granted subject to a performance condition (i.e., the occurrence of an Initial Public Offering and/or Business Combination). Compensation expense related to the Founders Shares should be recognized only when the performance condition is probable of occurrence under the applicable accounting literature in this circumstance. Pursuant to this
re-evaluation
of the Company’s management has determined that the vesting terms and recording of stock compensation expense is not properly recognized in the period vested.
As a result, the Company’s management, together with the Audit Committee, determined on April 14, 2022, that the Company’s financial statements and other financial data as of and for the six months ended June 30, 2021, should be restated in this Form
10-Q/A
as a result of this error.
As part of the review procedures made by the Company for the
re-evaluation
of ASC 718, the Company reviewed other financial statement accounts and made material adjustments relating to the Company’s accrued liabilities and over-allotment liability under ASC 480, “Distinguishing Liabilities from Equity.”
The Company has also
re-evaluated
the classification of its ordinary shares and determined that the ordinary shares issued during the Initial Public Offering and pursuant to the exercise of the underwriters’ overallotment can be redeemed or become redeemable subject to the occurrence of future events considered outside the Company’s control under ASC
480-10-S99.
Therefore, the Company concluded that the carrying value should include all ordinary shares subject to possible redemption, resulting in the ordinary shares subject to possible redemption being classified as temporary equity in its entirety. As a result, the Company has noted a reclassification adjustment related to temporary equity and permanent equity. This resulted in an adjustment to the initial carrying value of the ordinary shares subject to possible redemption with the offset recorded to additional
paid-in
capital (to the extent available), retained earnings (accumulated deficit) and ordinary shares.
Lastly, in connection with the change in presentation for the ordinary shares subject to redemption, the Company also restated its earnings per share calculation to allocate net income (loss) evenly to ordinary shares subject to redemption and those that are not subject to redemption. This presentation contemplates a Business Combination as the most likely outcome, in which case, both classes of ordinary shares participate pro rata in the income (loss) of the Company.
The financial information that has been previously filed or otherwise reported for this period is superseded by the information in this Form
10-Q/A,
and the financial statements and related financial information contained in the Quarterly Report as of June 30, 2021 originally filed with the Securities and Exchange Commission (the “SEC”) on August 24, 2021 should no longer be relied upon. On April 19, 2022, the Company filed a report on Form
8-K
disclosing the
non-reliance
on the financial statements included in the Original Quarterly Report.
These adjustments result in
non-cash,
non-operating
financial statement corrections and will have no impact on the Company’s current or previously reported cash position, operating expenses or total operating, investing or financing cash flows.
Internal Control Considerations
In connection with the restatement, management has
re-evaluated
the effectiveness of the Company’s disclosure controls and procedures and internal control over financial reporting as of June 30, 2021. The Company’s management has concluded that, in light of the errors described above, material weaknesses exist in the Company’s internal control over financial reporting and that the Company’s disclosure controls and procedures were not effective as a result thereof. Additionally, the Company has concluded that financial reporting controls over corporate governance related to the amended quarterly filing for the period June 30, 2021 was ineffective and that material weaknesses exist. Management plans to enhance the system of evaluating and implementing the accounting standards that apply to our financial statements, including enhanced training of our personnel and increased communication among our personnel and third-party professionals with whom we consult regarding application of complex financial instruments. Management is also designing and implementing additional corporate governance controls to mitigate issues related to financial reporting, including further review of the Company’s accrued liabilities. For a discussion of management’s consideration of our disclosure controls and procedures, internal controls over financial reporting, and the material weaknesses identified, see Part I, Item 4, “Controls and Procedures” of this Amended Form
10-Q/A.
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TB SA ACQUISITION CORP
Form 10-Q
For the Period Ended June 30, 2021
Table of Contents
 
     
Page
 
PART I. FINANCIAL INFORMATION
  
Item 1.
 
Financial Statements (Unaudited)
   1 
 
Unaudited Condensed Balance Sheet as of June 30, 2021 (as restated)
   1 
 
Unaudited Condensed Statements of Operations for the three months ended June 30, 2021, and for the period from January 27, 2021 (inception) through June 30, 2021 (as restated)
   2 
 
Unaudited Condensed Statement of Changes in Shareholders’ EquityDeficit for the period from January 27, 2021 (inception) through June 30, 2021 (as restated)
   3 
 
Unaudited Condensed Statement of Cash Flows for the period from January 27, 2021 (inception) through June 30, 2021 (as restated)
   4 
 
Notes to Unaudited Condensed Financial Statements (as restated)
   5 
Item 2.
 
Management’s Discussion and Analysis of Financial Condition and Results of Operations
19
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
20
Item 4.
Controls and Procedures
20
PART II. OTHER INFORMATION
21
Item 1.
Legal Proceedings
   21 
Item 1A.3.
 
Quantitative and Qualitative Disclosures About Market Risk Factors
   2124 
Item 2.4.
 
Controls and Procedures
24
PART II. OTHER INFORMATION
25
Item 1.
Legal Proceedings
25
Item 1A.
Risk Factors
25
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities
   2125 
Item 3.
 
Defaults Upon Senior Securities
   2125 
Item 4.
 
Mine Safety Disclosures
   2125 
Item 5.
 
Other Information
   2226 
Item 6.
 
Exhibits
   2226 
Table of Contents
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
TB SA ACQUISITION CORP
CONDENSED BALANCE SHEET
JUNE 30, 2021
(as Restated)
(Unaudited)
 

   
June 30, 2021
 
Assets
     
Current assets:
     
Cash
  $971,242 
Prepaid expenses
   595,955 
   
 
 
 
Total current assets
   1,567,197 
Cash Held in Trust account
   200,007,135 
Other assets
   402,945 
   
 
 
 
Total assets
   201,977,277 
   
 
 
 
Liabilities and Shareholders’ Equity
     
Current liabilities:
     
Accounts payable and accrued expenses
  $412,000 
Due to related party
   64,768 
   
 
 
 
Total current liabilities
   476,768 
Warrant Liabilities
   11,000,001 
   
 
 
 
Total liabilities
   11,476,769 
   
 
 
 
Commitments
   0 
Class A ordinary shares subject to possible redemption, 18,550,051 shares at redemption value of $10.00 per share
   185,500,507 
Shareholders’ equity:
     
Preference shares, $0.0001 par value; 5,000,000 shares authorized; NaNissued and outstanding
   0   
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; 1,449,949 shares issued and outstanding (
excluding
18,550,051 shares subject to possible redemption)
   145 
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 5,000,000 shares issued and outstanding
   500 
Additional paid-in capital
   1,480,139 
Retained earnings
   3,519,217 
   
 
 
 
Total shareholders’ equity
   5,000,001 
   
 
 
 
Total liabilities and shareholders’ equity
  $201,977,277 
   
 
 
 
   
June 30, 2021
 
Assets
     
Current assets:
     
Cash  $971,242 
Prepaid expenses   595,955 
   
 
 
 
Total current assets
   1,567,197 
Cash Held in Trust account   200,007,135 
Other assets   402,945 
   
 
 
 
Total assets
   201,977,277 
   
 
 
 
 
 
 
 
 
Liabilities and Shareholders’ Deficit
     
Current liabilities:
     
Accounts payable and accrued expenses  $567,000 
Due to related party   64,768 
   
 
 
 
Total current liabilities
   631,768 
Warrant Liabilities   11,000,001 
   
 
 
 
Total liabilities
   11,631,769 
   
 
 
 
Commitments
   0 
Class A ordinary shares subject to possible redemption, 20,000,000
 
shares at redemption value of $10.00 per share
   200,007,135 
Shareholders’ deficit:
     
Preference shares, $0.0001 par value; 5,000,000 shares authorized; NaNissued and outstanding
   —   
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; 0
 s
hares issued and outstanding (
excluding
20,000,000

shares subject to possible redemption)
 at June 30, 2021
   — 
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 5,000,000 shares issued and outstanding
   500 
Additional paid-in capital
   267,150 
Accumulated deficit   (9,929,277) 
   
 
 
 
Total shareholders’ deficit
   (9,661,627) 
   
 
 
 
Total liabilities and shareholders’ deficit
  $201,977,277 
   
 
 
 
The accompanying notes are an integral part of these unaudited condensed financial statements.
 
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TB SA ACQUISITION CORP
CONDENSED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2021 AND
THE PERIOD FROM JANUARY 27, 2021 (INCEPTION) THROUGH JUNE 30, 2021
(as Restated)
(Unaudited)
 
   
Three Months
Ended
June 30, 2021
  
January 27, 2021
(Inception) Through
June 30, 2021
 
Formation and operating costs
  $288,784  $329,586 
   
 
 
  
 
 
 
Loss from operations
   (288,784)   (329,586) 
   
 
 
  
 
 
 
Other Income (Expense)
         
Interest income
   7,135   7,135 
Offering expenses related to warrant issuance
   0     (228,331) 
Change in fair value of warrant liabilities
   3,519,999   4,069,999 
   
 
 
  
 
 
 
Total other income
   3,527,134   3,848,803 
   
 
 
  
 
 
 
Net income
  $3,238,350  $3,519,217 
   
 
 
  
 
 
 
Weighted average shares outstanding, Class A ordinary shares subject to possible redemption
   18,229,775   18,226,407 
   
 
 
  
 
 
 
Basic and diluted net income per share, Class A ordinary shares subject to possible redemption
  $0.00  $0.00 
   
 
 
  
 
 
 
Weighted average shares
outstanding, Non-redeemable ordinary
shares
   7,066,929   6,482,387 
   
 
 
  
 
 
 
Basic and diluted net income per
share, Non-redeemable
ordinary shares
  $0.46  $0.54 
   
 
 
  
 
 
 
   
Three Months
Ended
June 30, 2021
  
January 27, 2021
(Inception) Through
June 30, 2021
 
Formation and operating costs  $373,784  $414,586 
Stock compensation expense   —   267,150 
 
 
 
 
 
 
 
 
 
Loss from operations
   (373,784)   (681,736)
Other Income (Expense)
         
Interest income   7,135   7,135 
Offering expenses related to warrant issuance   —   (233,453)
Change in over-allotment liability   34,133   10,676 
Change in fair value of warrant liabilities   3,519,999   4,069,999 
   
 
 
  
 
 
 
Total other income
   3,561,267   3,854,357 
   
 
 
  
 
 
 
Net income
  $3,187,483  $3,172,621 
   
 
 
  
 
 
 
Weighted average shares outstanding of Class A ordinary shares   20,000,000   12,645,161 
   
 
 
  
 
 
 
Basic and diluted net income per share, Class A ordinary shares  $0.13  $0.18 
   
 
 
  
 
 
 
Weighted average shares
outstanding
 
of
Class B
 ordinary
shares
   5,000,000   4,838,710 
   
 
 
  
 
 
 
Basic and diluted net income per
share, 
Class B
ordinary shares
  $0.13  $0.18 
   
 
 
  
 
 
 
The accompanying notes are an integral part of these unaudited condensed financial statements.
 
2
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TB SA ACQUISITION CORP
CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITYDEFICIT
FOR THE PERIOD FROM JANUARY 27, 2021 (INCEPTION) THROUGH JUNE 30, 2021
(as Restated)
(Unaudited)
 
   
Ordinary Shares
  
Additional
      
Total
 
   
Class A
  
Class B
  
Paid-In
  
Accumulated
   
Shareholders’
 
   
Shares
  
Amount
  
Shares
  
Amount
  
Capital
  
Deficit
   
Equity
 
Balance as of January 27, 2021 (Inception)
   0    $0     0    $0    $0    $0     $0   
Issuance of Founder Shares
  
 
—  
 
 
 
—  
 
  5,750,000   575   24,425  
 
—  
 
   25,000 
Sale of Units in Initial Public Offering, net of underwriter’s fees, other offering costs and fair value of Public Warrants
   20,000,000   2,000   —     —     186,390,957   —      186,392,957 
Excess Sponsor paid over Fair value of Private Placement Warrants
   —     —     —     —     563,334   —      563,334 
Class A ordinary shares subject to possible redemption
   (18,226,216)   (1,823)   —     —     (182,260,334)   —      (182,262,157) 
Net income
   —     —     —     —     —     280,867    280,867 
Balance as of March 31, 2021
   1,773,784  $177   5,750,000  $575  $4,718,382  $280,867   $5,000,001 
Forfeiture of Founder Shares
   —     —     (750,000)   (75)   75   —      —   
   
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
   
 
 
 
Class A ordinary shares subject to possible redemption
   (323,835)   (32)   —     —     (3,238,318)   —      (3,238,350)
Net income
   —     —     —     —     —     3,238,350    3,238,350 
   
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
   
 
 
 
Balance as of June 30, 2021
   1,449,949  $145   5,000,000  $500  $1,480,139  $3,519,217   $5,000,001 
   
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
   
 
 
 
   
Ordinary Shares
  
Additional

Paid-In

Capital
  
Accumulated

Deficit
  
Total

Shareholders’

Deficit
 
   
Class A
   
Class B
 
   
Shares
   
Amount
   
Shares
  
Amount
 
Balance as of January 27, 2021 (Inception)
   —    $—     —    $—    $—    $—     $—   
Issuance of Founder Shares
  
 
—  
 
 
 
—  
 
  5,750,000   575   24,425  
 
—  
 
   25,000 
Excess Sponsor paid over Fair value of Private Placement
Warrants		   —   —   —     —     563,334   —      563,334 
Remeasurement of Class A ordinary shares to redemption value   —     —     —     —     (587,759)   (13,094,838)    (13,682,597) 
Fair value of Founder Shares transferred to Directors   —   —   —     —     267,150   —      267,150 
Net loss   —     —     —     —     —     (14,862)    (14,862) 
Balance as of March 31, 2021
  
 
—  $—   5,750,000  $575  $267,150  $(13,109,700)   $(12,841,975) 
Forfeiture of Founder Shares   —     —     (750,000)  (75)  75   —      —   
    
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
   
 
 
 
Remeasurement of Class A ordinary shares to redemption value   —   —   —     —     (75)  
(7,060

)   (7,135)
Net income   —     —     —     —     —     3,187,483    3,187,483 
   
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
   
 
 
 
Balance as of June 30, 2021
   —  $—   5,000,000  $500  $267,150  $(9,929,277)   $(9,661,627) 
   
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
   
 
 
 
The accompanying notes are an integral part of these unaudited condensed financial statements.
 
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TB SA ACQUISITION CORP
CONDENSED STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM JANUARY 27, 2021 (INCEPTION) THROUGH JUNE 30, 2021
(as Restated)
(Unaudited)
 

Cash Flows from Operating Activities:
     
Net income
  $3,519,217 
Adjustments to reconcile net income to net cash used in operating activities:
     
Interest earned on Trust Account
   (7,135) 
Change in fair value of warrant liabilities
   (4,069,999) 
Offering costs allocated to Warrants
   228,331 
Changes in current assets and current liabilities:
     
Prepaid assets
   (998,900) 
Accounts payable
   412,000 
Due to related party
   64,768 
   
 
 
 
Net cash used in operating activities
   (851,718) 
   
 
 
 
Cash Flows from Investing Activities:
     
Investment of cash into Trust Account
   (200,000,000) 
   
 
 
 
Net cash used in investing activities
   (200,000,000) 
   
 
 
 
Cash Flows from Financing Activities:
     
Proceeds from Initial Public Offering, net of underwriter’s discount
   196,000,000 
Proceeds from purchase of Private Placement Warrants by related party
   6,500,001 
Proceeds from issuance of Founder Shares
   25,000 
Proceeds from issuance of Promissory note – related party
   133,541 
Payment of Promissory note - related party
   (133,541) 
Payments of offering costs
   (702,041) 
   
 
 
 
Net cash provided by financing activities
   201,822,960 
   
 
 
 
Net Change in Cash
   971,242 
Cash - Beginning
  
 
0  
 
   
 
 
 
Cash - Ending
  $971,242 
   
 
 
 
Supplemental Disclosure
of Non-Cash Financing
Activities:
     
Initial value of Class A ordinary shares subject to possible redemption
  $181,753,690 
   
 
 
 
Change in value of Class A ordinary shares subject to possible redemption
  $3,746,817 
   
 
 
 
Initial value of warrant liabilities
  $15,070,000 
   
 
 
 
Cash Flows from Operating Activities:
     
Net income  $3,172,621 
Adjustments to reconcile net income to net cash used in operating activities:
     
Interest earned on Trust Account   (7,135) 
Stock compensation expense   267,150 
Change in fair value of over-allotment liability   (10,676) 
Change in fair value of warrant liabilities   (4,069,999)
Offering costs allocated to Warrants   233,453 
Changes in current assets and current liabilities:     
Prepaid assets   (998,900)
Accounts payable   567,000 
Due to related party   64,768 
   
 
 
 
Net cash used in operating activities
   (781,718)
   
 
 
 
Cash Flows from Investing Activities:
     
Investment of cash into Trust Account   (200,000,000)
   
 
 
 
Net cash used in investing activities
   (200,000,000)
   
 
 
 
Cash Flows from Financing Activities:
     
Proceeds from Initial Public Offering, net of underwriter’s discount   196,000,000 
Proceeds from purchase of Private Placement Warrants by related party   6,500,001 
Proceeds from issuance of Founder Shares   25,000 
Proceeds from issuance of Promissory note — related party   133,541 
Payment of Promissory note — related party   (133,541)
Payments of offering costs   (772,041)
   
 
 
 
Net cash provided by financing activities
   201,752,960 
   
 
 
 
Net Change in Cash
   971,242 
Cash — Beginning  
 
—  
 
   
 
 
 
Cash — Ending
  $971,242 
   
 
 
 
Supplemental Disclosure
of Non-Cash Financing
Activities:
     
Remeasurement of Class A ordinary shares subject to possible redemption  $13,689,732 
   
 
 
 
The accompanying notes are an integral part of these unaudited condensed financial statements.
 
4
Table of Contents
TB SA ACQUISITION CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(as Restated)
Note 1 — Organization and Business Operations
Organization and General
TB SA Acquisition
Corp (the “Company”) was incorporated as a Cayman Islands exempted company on January 27, 2021. The Company was formed for the purpose of entering into 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 not limited to a particular industry or geographic region for purposes of consummating its Business Combination. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies. The Company has selected December 31 as its fiscal year end.
As of June 30, 2021, the Company had not yet commenced any operations. All activity through June 30, 2021, relates to the Company’s formation and preparation for its initial public offering (“Initial Public Offering” or “IPO”) 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 IPO.
Financing
The registration statement for the Company’s IPO was declared effective on March 22, 2021 (the “Effective Date”). On March 25, 2021, the Company consummated the IPO of 20,000,000 units (the “Units” and, with respect to the Class A ordinary shares included in the Units sold, the “public shares”), at $10.00
per Unit, generating gross proceeds of $200$200,000,000
,000,000, ,
which is discussed in Note 4. 4
.
Simultaneously with the closing of the IPO, the Company consummated the sale of 4,333,334 warrants (each, a “Private Placement Warrant” and collectively, the “Private Placement Warrants”) at a price of $1.50
 
per Private Placement Warrant, which is discussed in Note 5.
Transaction costs amounted to $4,702,041$4,772,041 consisting of $4,000,000 of underwriting fees and $702,041$772,041 of other offering costs. Of the total transaction cost $228,331 $233,453
was reclassed to expense
as non-operating expense
in the statements of operations with the rest of the offering cost
s
costs charged to shareholders’ equity. The transaction costs were allocated based on the relative fair value basis, compared to the total offering proceeds, between the fair value of the public warrant liabilities and the Class A ordinary shares.
Trust Account
Following the closing of the IPO on March 25, 2021, an amount of $200,000,000 from the net proceeds of the sale of the Units in the IPO and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”) which is invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of
Rule 2a-7 of
the Investment Company Act, as determined by the Company. Except with respect to interest earned on the funds held in the Trust Account that may be released to the Company to pay its tax obligations, the proceeds from the IPO and the sale of the Private Placement Warrants will not be released from the Trust Account until the earliest of (a) the completion of the Company’s initial Business Combination, (b) the redemption of any public shares properly submitted in connection with a shareholder vote to amend the Company’s amended and restated certificate of incorporation, and (c) the redemption of the Company’s public shares if the Company is unable to complete its initial Business Combination within 24 months from the closing of the IPO, subject to applicable law. The proceeds deposited in the Trust Account could become subject to the claims of the Company’s creditors, if any, which could have priority over the claims of the Company’s public shareholders.
Initial Business Combination
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the IPO, although substantially all of the net proceeds are intended to be generally applied toward consummating a Business Combination.
The Company’s Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the Trust Account (as defined below) (net of taxes payable) at the time of the signing an agreement to enter into a Business Combination. However, the Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the outstanding voting securities of the target business or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act. There is no assurance that the Company will be able to successfully effect a Business Combination.
 
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Table of Contents
The Company will provide its public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of the initial Business Combination either (i) in connection with a shareholder meeting called to approve the initial Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a proposed initial Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The shareholders will be entitled to redeem their shares for a pro rata portion of the amount then on deposit in the Trust Account (initially $10.00 per 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 Class A ordinary shares subject to redemption is recorded at a redemption value and classified as temporary equity upon the completion of the IPO, in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity” (“ASC 480”). In such case, the Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 either immediately prior to or upon consummation of a Business Combination and, if the Company seeks shareholder approval, a majority of the issued and outstanding shares voted are voted in favor of the Business Combination.
The Company will have 24 months from the closing of the IPO (with the ability to extend with shareholder approval) to consummate a Business Combination (the “Combination Period”). However, if the Company is unable to complete a Business Combination within the Combination Period, the Company will redeem 100% of the outstanding public shares for a pro rata portion of the funds held in the Trust Account, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to the Company, divided by the number of then outstanding public shares, subject to applicable law and as further described in the registration statement, and then seek to dissolve and liquidate.
The Company’s sponsor, TCP SA, LLC, a Cayman Islands limited liability company (the “Sponsor”), officers and directors have agreed to (i) waive their redemption rights with respect to their Founder Shares (as defined below), Private Placement Warrants and public shares in connection with the completion of the initial Business Combination, (ii) waive their redemption rights with respect to their Founder Shares and public shares in connection with a shareholder vote to approve an amendment to the Company’s amended and restated certificate of incorporation, and (iii) waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares and Private Placement Warrants if the Company fails to complete the initial Business Combination within the Combination Period.
The Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has entered into a written letter of intent, confidentiality or similar agreement or Business Combination agreement, 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 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 prospective target business who 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 underwriter of the IPO against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). However, the Company has not asked its Sponsor to reserve for such indemnification obligations, nor has the Company independently verified whether its Sponsor has sufficient funds to satisfy its indemnity obligations and believe that the Sponsor’s only assets are securities of the Company. Therefore, the Company cannot assure that its Sponsor would be able to satisfy those obligations.
Liquidity
As of June 30, 2021, the Company had approximately $1.0 million$971,000 in its operating bank account, and working capital of
approximately $1.1 million.$935,000.
All remaining cash held in the Trust Account is generally unavailable for the Company’s use, prior to an initial Business Combination, and is restricted for use either in a Business Combination or to redeem Class A ordinary shares. As of June 30, 2021, none of the amount in the Trust Account was available to be withdrawn as described above.
Through June 30, 2021, the Company’s liquidity needs were satisfied through receipt of $25,000 from the sale of the Founder Shares and the net proceeds from the consummation of the Private Placement not held in 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 officers and directors may, but are not obligated to, provide the Company with working capital loans. As of June 30, 2021, there were 0 amounts outstanding under any working capital loan.
Until consummation of its Business Combination, the Company will be using the funds not held in the Trust Account, and any additional Working Capital Loans (as defined in Note 6) from the initial shareholders, the Company’s officers and directors, or their respective affiliates (which is described in Note 6), for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the Business Combination. 
 
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Table of Contents
The Company
does not believe it will need to raise additional funds in order to meet the expenditures required for operating its business. However, if the Company’s estimates of the costs
of undertaking in-depth due diligence
and negotiating a Business Combination is less than the actual amount necessary to do so, the Company may have insufficient funds available to operate its business prior to the initial Business Combination. Moreover, the Company will need to raise additional capital through loans from its Sponsor, officers, directors, or third parties. None of the Sponsor, officers or directors are under any obligation to advance funds to, or to invest in, the Company. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of its business plan, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all.
Risks and Uncertainties
On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus
(the “COVID-19 outbreak”). In
March 2020, the WHO
classified the COVID-19 outbreak as
a pandemic, based on the rapid increase in exposure globally. The full impact
of the COVID-19 outbreak continues
to evolve. The impact
of the COVID-19 outbreak on
the Company’s financial position will depend on future developments, including the duration and spread of the outbreak and related advisories and restrictions. These developments and the impact
of the COVID-19 outbreak on
the financial markets and the overall economy are highly uncertain and cannot be predicted. If the financial markets and/or the overall economy are impacted for an extended period, the Company’s financial position may be materially adversely affected. Additionally, the Company’s ability to complete an initial Business Combination may be materially adversely affected due to significant governmental measures being implemented to
contain the COVID-19 outbreak or
treat its impact, including travel restrictions, the shutdown of businesses and quarantines, among others, which may limit the Company’s ability to have meetings with potential investors or affect the ability of a potential target company’s personnel, vendors and service providers to negotiate and consummate an initial Business Combination in a timely manner. The Company’s ability to consummate an initial Business Combination may also be dependent on the ability to raise additional equity and debt financing, which may be impacted
by the COVID-19 outbreak and
the resulting market downturn.
Note 2
A
— CorrectionRestatement of
a
n Error
i
n Previously FurnishedIssued Financial Statements
The Company has
re-evaluated
the Company’s application of ASC 718, “Compensation — Stock Compensation,” and notes that the transfer of the Class B Ordinary shares is in the scope of ASC 718. Under ASC 718, stock-based compensation associated with equity-classified awards is measured at fair value upon the grant date. The Founders Shares were granted subject to a performance condition (i.e., the occurrence of an Initial Public Offering and/or Business Combination). Compensation expense related to the Founders Shares should be recognized only when the performance condition is probable of occurrence under the applicable accounting literature in this circumstance. Pursuant to this
re-evaluation,
the Company’s management has determined that the vesting terms and recording of stock compensation expense is not properly recognized in the period vested.
In addition to the Company’s
re-evaluation
of ASC 718, the Company also made a material adjustment to the Company’s accrued liabilities as of June 30, 2021. Furthermore, the Company
re-evaluated
its application of ASC 480, “Distinguishing Liabilities from Equity,” for the underwriter’s over-allotment option, of which the Company evaluated that a liability existed as of March 25,31, 2021 that was extinguished during the three months ended June 30, 2021 that should be presented within the condensed financial statements
.

On April 12,The Company previously determined the ordinary shares subject to possible redemption to be equal to the redemption value of $10.00 per ordinary share while also taking into consideration its charter’s requirement that a redemption cannot result in net tangible assets being less than $5,000,001. Upon review of its financial statements for the period ended June 30, 2021, the Acting DirectorCompany reevaluated the classification of the Division of Corporation Financeordinary shares and Acting Chief Accountantdetermined that the ordinary shares issued during the Initial Public Offering and pursuant to the exercise of the U.S. Securities and Exchange Commission (the “SEC”) issued a statement regardingunderwriters’ overallotment can be redeemed or become redeemable subject to the accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”) (the “SEC Statement”).occurrence of future events considered outside the Company’s control under
ASC480-10-S99.
Therefore, management concluded that the carrying value should include all ordinary shares subject to possible redemption, resulting in the ordinary shares subject to possible redemption being classified as temporary equity in its entirety. As a result, management has noted a reclassification adjustment related to temporary equity and permanent equity. This resulted in an adjustment to the initial carrying value of the SEC Statementordinary shares subject to possible redemption with the offset recorded to additional
paid-in
capital (to the extent available), retained earnings (accumulated deficit) and ordinary shares.
In connection with the change in light of evolving views aspresentation for the ordinary shares subject to certain provisions commonly included in warrants issued by special purpose acquisition companies, the Company re-evaluated the accounting for Public Warrants and Private Placement Warrants (each as defined herein and, collectively, “Warrants”) under FASB ASC Topic 815-40, “Derivatives and Hedging — Contracts in Entity’s Own Equity”
(“ASC 815-40”), and concluded that they do not meet the criteria to be classified in shareholders’ equity. Since the Warrants meet the definition of a derivative under ASC 815-40, the Company has revised the financial statements to classify the Warrants as liabilities on the balance sheet at fair value, with subsequent changes in their respective fair values recognized in the statement of operations at each reporting date. During the Quarterredemption, the Company also discoveredrestated its earnings per share calculation to allocate net income (loss) evenly to ordinary shares subject to redemption and those that they recordedare not subject to redemption. This presentation contemplates a $7,000,000 liability for deferred underwriter’s discount that was actually a deferred marketing agreement that should not have been recorded until business combination.Business Combination as the most likely outcome, in which case, both classes of ordinary shares participate pro rata in the income (loss) of the Company.
The following summarizestables present the effectimpacts of the restatement described above included herein on each financial statement line item as of the date of the Company’s consummation of its IPO.adjustments stated above:
As of March 25, 2021
  
As Previously
Reported
   
Adjustment
   
As

Restated
 
Balance Sheet
               
Warrant Liabilities
  $0     $16,060,000   $16,060,000 
Deferred underwriter’s discount
   7,000,000    (7,000,000)    0   
Total Liabilities
   8,808,541    9,060,000    17,868,541 
Shares Subject to Redemption
   189,823,690    (9,060,000)    180,763,690 
Class A Ordinary shares
   102    90    192 
Class B Ordinary shares
   575    0      575 
Additional Paid in Capital
   5,008,893    228,240    5,237,133 
(Accumulated Deficit)
   (9,562)    (228,330)    (237,892) 
Total Shareholders’ Equity
  $5,000,008   $0     $5,000,008 
These amounts have been further revised as discussed in Note 2B below.
Balance Sheet as of June 30, 2021 (unaudited)
  
As Reported
   
Adjustment
   
As Restated
 
Accrued Expenses  
$
412,000   
$
155,000   
$
567,000
Total Liabilities   11,476,769    155,000    11,631,769 
Class A ordinary shares subject to possible redemption   185,500,507    14,506,628    200,007,135
Class A ordinary shares   145    (145)   —
Additional
Paid-In
Capital
   1,480,139    (1,212,989)   267,150
(Accumulated Deficit) Retained Earnings   3,519,217    (13,448,494)    (9,929,277) 
Total Shareholders’ (Deficit) Equity   5,000,001    (14,661,628)   (9,661,627
)

 
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Table of Contents
Note 2B
— Correction of
a
n Error
i
n Previously
Issued
Financial Statements
Statement of Operations for the period from January 27, 2021 (Inception)
through June 30, 2021 (unaudited)
  
As Reported
   
Adjustment
   
As Restated
 
Formation and operating costs

 
 
$
(329,586

) 

 
$

(85,000

) 
 
$
(414,586

) 
Stock Compensation Expense
  

—
 
 

(267,150
)
 

(267,150
)
Offering expenses related to warrant issuance
  
 
(228,331
)
 
 
(5,122
)
 
 
(233,453
)
Change in fair value over-allotment liability
  
 
—
 
 
 
10,676
 
 
 
10,676
 
Net Income
  
$

3,519,217
 
 
$
(346,596
) 
 
$
3,172,621
 
Weighted average shares outstanding, Class A ordinary shares
  
 
18,226,407
 
 
 
(5,581,246
)
 
 
12,645,161
 
Basic and diluted net income per share, Class A ordinary shares
  $—     $0.18   $0.18 
Weighted average shares outstanding, Class B ordinary shares
   6,482,387    (1,643,677)    4,838,710 
Basic and diluted net income per share, Class B ordinary shares
  $0.54   $(0.36)   $0.18 
On April 12, 2021, the Acting Director of the Division of Corporation Finance and Acting Chief Accountant of the SEC issued the SEC Statement. The SEC Statement advises, among other things, that certain settlement terms and provisions generally present in SPAC warrants preclude such warrants from being accounted for as equity. As a result of the SEC Statement, during the three months ended March 31, 2021, the Company reevaluated the accounting treatment of the Public Warrants and Private Placement Warrants in consideration of the guidance in ASC 815-40 and concluded that the public and private warrants should be classified as a liability measured at fair value at inception (on the date of issuance) and at each reporting, with changes in fair value recognized in the statement of operations in the period of change, However, subsequent to filing of its Quarterly Report on Form 10-Q for the three months ended March 31, 2021, the Company determined that the valuations used to record the warrant liabilities were based on certain incorrect assumptions, and when corrected results in a change to the initial warrant liability as of March 25, 2021 and the remeasured warrant liability as of March 31, 2021.
Statement of Operations for three months ended June 30, 2021 (unaudited)
  
As Reported
   
Adjustment
  
As Restated
 
Formation and operating costs  $(288,784)   $(85,000)   $(373,784) 
Change in fair value over-allotment liability
  
—     
34,133   
34,133 
Net Income
  $3,238,350   $(50,867)   $3,187,483 
Weighted average shares outstanding, Class A ordinary shares
   18,229,775    1,770,225    20,000,000 
Basic and diluted net income per share, Class A ordinary shares
  $—     $0.13   $0.13 
Weighted average shares outstanding, Class B ordinary shares
   7,066,929    (2,066,929)    5,000,000 
Basic and diluted net income per share, Class B ordinary shares
  $0.46   $(0.33)   $0.13 
The table below summarizes the effects of the revision of the February 9, 2021 balance sheet and the revision of the March 31, 2021 financial statements from what was previously filed in the Quarterly Report on Form 10-Q as of March 31, 2021, as discussed above in Note 2A in the “As Restated” column.
 
   
As Previously

Reported in 10-Q

as of

March 31, 2021
  
Adjustment
  
As

Revised
 
Balance
Sheet as of March 25, 2021
             
Warrant Liabilities
  $16,060,000  $(990,000)  $15,070,000 
Total Liabilities
   17,868,541   (990,000)   16,878,541 
Shares Subject to Redemption
   180,763,690   990,000   181,753,690 
Class A Ordinary shares
   192   (10)   182 
Class B Ordinary shares
   575   0     575 
Additional Paid in Capital
   5,237,133   10   5,237,143 
(Accumulated Deficit)
   (237,892)   0     (237,892) 
Total Shareholders’ Equity
  $5,000,008  $0    $5,000,008 
Number of ordinary shares subject to redemption
   18,076,369   99,000   18,175,369 
    
Balance Sheet
as of March 31, 2021 (unaudited)
             
Warrant Liabilities
  $15,686,667  $(1,166,667)  $14,520,000 
Total Liabilities
   17,516,175   (1,166,667)   16,349,508 
Shares Subject to Redemption
   181,095,490   1,166,667   182,262,157 
Class A Ordinary shares
   189   (12)   177 
Class B Ordinary shares
   575   0     575 
Additional Paid in Capital
   4,895,037   (176,655)   4,718,382 
(Accumulated Deficit)
   104,200   176,667   280,867 
Total Shareholders’ Equity
  $5,000,001  $0    $5,000,001 
Number of ordinary shares subject to redemption
   18,109,549   116,667   18,226,216 
    
Statement of Operations for the three months ended March 31, 2021 (unaudited)
             
Change in fair value of warrant liability
  $373,333   176,667   550,000 
Net Income
  $104,200   176,667   280,867 
Weighted average shares outstanding, Class A ordinary shares subject to possible redemption
   18,081,109   101,524   18,182,633 
Basic and diluted net income per share, Class A ordinary shares subject to possible redemption
   0     0     0   
Weighted average shares outstanding, Non-redeemable ordinary shares
   5,899,247   (7,896)   5,891,351 
Basic and diluted net income per share, Non-redeemable ordinary shares
  $0.02  $0.03  $0.05 
    
Statem
ent of Cash Flows
for the three months ended March 31, 2021
(unaudited)
             
Net Income
   104,200   176,667   280,867 
Change in fair value of warrant liability
   (373,333)   (176,667)   (550,000)
Initial Value of Class A ordinary shares subject to possible redemption
   180,763,690   990,000   181,753,690 
Change in Class A ordinary shares subject to possible redemption
  $331,800  $176,667  $508,467 
Statement of Cash Flows for the period from January 27, 2021 (Inception) through
June 30, 2021 (unaudited)
  
As Reported
   
Adjustment
   
As Restated
 
Net Income
  $3,519,217   $(346,596)   $3,172,621 
Stock Compensation Expense
   —      267,150    267,150 
Offering expenses related to warrant issuance
   228,331    5,122    233,453 
Change in fair value over-allotment liability
   —      (10,676)    (10,676) 
Accounts Payable and Accrued Expenses
   412,000    155,000    567,000 
Payment of offering costs
   (702,041)    (70,000)    (772,041) 
Statement of Shareholders’ Deficit for the period from January 27, 2021
(Inception) through June 30, 2021 (unaudited)
 
As Reported
  
Adjustment
  
As Restated
 
Fair value of Founder Shares transferred to Directors
 $—    $267,150  $267,150 
Remeasurement of Class A ordinary shares for the period from January 27, 2021 (Inception) through March 31, 2021  —     (13,682,597)   (13,682,597) 
Remeasurement of Class A ordinary shares, for the three months ended June 30, 2021
  —     (7,135)   (7,135) 
Class A ordinary shares subject to possible redemption
  (182,262,157)   182,262,157   —   
Sale of Units in Initial Public Offering, net of underwriter’s fees, other offering costs and fair value of Public Warrants
  186,392,957   (186,392,957)   —   
Net Income (Loss) for the period from January 27, 2021 (Inception) through March 31, 2021  280,867   (295,729)   (14,862) 
Net Income for the three months ended June 30, 2021
  3,238,350   (50,867)   3,187,483 
 
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Table of Contents
Note 3 — Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of
America
(“ America(“GAAP”) for interim financial information and in accordance with the instructions to
Form 10-Q and
Article 8 of
Regulation S-X of
the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.
The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s prospectus for its IPO as filed with the SEC on March 24, 2021, as well as the Company’s Current Reports on
Form 8-K. The
interim results for the three months ended June 30, 2021 and for the period from January 27, 2021 (inception) through June 30, 2021 are not necessarily indicative of the results to be expected for the
year
ending December 31, 2021 or for any future interim periods.
Emerging Growth Company Status
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 of 2002, 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 shareholder 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 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, the Company, 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 which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
9
Table of Contents
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 expenses during the reporting period. Actual results could differ from those estimates.
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.
Marketable Securities Held in Trust Account
At June 30, 2021, the Trust Account had $200,007,135 held in marketable securities. For the period from January 27, 2021 (inception) through June 30, 2021, the Company did 0t withdraw any interest income from the Trust Account to pay its tax obligations.
All of the Company’s investments held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheet at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held in the Trust Account are included in interest earned on marketable securities held in Trust Account in the accompanying statement of operations. The estimated fair values of investments held in Trust Account are determined using available market information.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Corporation coverage of $250,000, and investments held in the Trust Account. At June 30, 2021, the Company has not experienced losses on this account.
C
lassClass A Ordinary Shares Subject to Possible Redemption
All of the 20,000,000
T
he Company accounts for its Class A ordinary shares subjectsold as part of the Units in the IPO contain a redemption feature which allows for the redemption of such public shares in connection with the Company’s liquidation or if there is a shareholder vote or tender offer in connection with the Business Combination and in connection with certain amendments to possible redemption inthe Company’s amended and restated memorandum and articles of association. In accordance with the guidance in ASC 480. Class A ordinary shares subject to mandatory480-10-S99, redemption (if any) are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are eitherprovisions not solely within the control of the holder orCompany require ordinary shares subject to redemption upon the occurrenceto be classified outside of uncertain events not solely within the Company’s control) are classified as temporarypermanent equity. AtTherefore, all other times, ordinary shares are classified as shareholders’ equity. The Company’s Class A ordinary shares feature certain redemption rights that are considered to behave been classified outside of permanent equity. 
The Company recognizes changes in redemption value immediately as they occur and adjusts the Company’s control and subjectcarrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid in capital to the occurrence of uncertain future events. Accordingly, as of June 30, 2021, 18,550,051 Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheet.extent available and accumulated deficit.

N
etNet Income per Ordinary Share
T
heThe Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” The Company’s statements of operations include a presentation of income per Class A ordinary share subject to possible redemption in a manner similar to
the two-class method
of income per share. Net income per ordinary share, basic and diluted for Class A ordinary shares subject to redemption, is calculated by dividing the interest income earned on the Trust Account by the weighted average number of Class A ordinary shares subject to possible redemption outstanding since original issuance. Net loss per ordinary share, basic and diluted
for non-redeemable ordinary
shares, is calculated by dividing the net income, adjusted for income attributable to Class A ordinary shares subject to redemption, by the weighted average number
of non-redeemable ordinary
shares outstanding for the
period. Non-redeemable ordinary
shares include the Founder Shares as these shares do not have any redemption features and do not participate in the income earned on the Trust Account.
 
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The Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into ordinary shares 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.
Reconciliation
of Net Income per Ordinary Share
The Company has two classes of shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Earnings and losses are shared pro rata between the two classes of shares. The 11,000,000 potential common shares for outstanding warrants to purchase the Company’s shares were excluded from diluted net income is adjustedper share for the portion of income that is attributable to ordinary shares subject to possible redemption, as these shares only participate inperiod from January 27, 2021 (inception) through June 30, 2021, because the earnings ofwarrants are contingently exercisable, and the Trust Account andcontingencies have not the income or losses of the Company. Accordingly, basic andyet been met. As a result, diluted net income per ordinary share is calculatedthe same as follows:basic net income per ordinary share for the periods presented.
The table below presents a reconciliation of the numerator and denominator used to compute basic and diluted net income per share for each class of ordinary share:

 
   
Three Months Ended

June 30, 2021
   
January 27, 2021
(inception) to

June 30, 2021
 
Redeemable Class A Ordinary Shares
          
Numerator: Earnings allocable to Redeemable Class A Ordinary Shares
          
Interest earned on marketable securities held in Trust Account
  $7,135   $7,135 
Less: Income allocable to
Non-Redeemable
Class A Ordinary Shares
   (517)    (517) 
   
 
 
   
 
 
 
Net income allocable to shares subject to possible redemption
  $6,618   $6,618 
   
 
 
   
 
 
 
Denominator: Weighted Average Redeemable Class A Ordinary Shares
          
Basic and diluted weighted average shares outstanding
   18,229,775    18,226,407 
   
 
 
   
 
 
 
Basic and diluted net income per share
  $0     $0   
   
 
 
   
 
 
 
Non-Redeemable
Class A and Class B Ordinary Shares
          
Numerator: Net Loss Minus Net Earnings
          
Net income
  $3,238,350   $3,519,217 
Less: Income allocable to ordinary shares subject to possible redemption
   (6,618)    (6,618) 
   
 
 
   
 
 
 
Non-Redeemable
net income
  $3,231,732   $3,512,599 
   
 
 
   
 
 
 
Weighted average shares outstanding, basic and diluted
   7,066,929    6,482,387 
   
 
 
   
 
 
 
Basic and diluted net income per ordinary share
  $0.46   $0.54 
   
 
 
   
 
 
 
   
For the three months
ended June 30, 2021
   
For the period from January 27, 2021
(inception) through June 30, 2021
 
   
Class A
   
Class B
   
Class A
   
Class B
 
Basic and diluted net income per share:        
Numerator:
        
Net income  $2,549,986   $637,497  
$

2,294,589

  
$

 
878,032
 
Denominator:                  
Weighted-average shares outstanding   20,000,000    5,000,000   
12,645,161

  
 
4,838,710
 
Basic and diluted net income per share  $0.13   $0.13  
$
 
 
0.18
  
$
 
0.18
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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Offering Costs
The Company complies with the requirements of FASB ASC
ASC 340-10-S99-1 and
and SEC Staff Accounting Bulletin Topic 5A, “Expenses of Offering.” Offering costs consist principally of professional and registration fees incurred through the balance sheet date that are related to the Public Offering and that were charged to shareholders’stockholders’ equity upon the completion of the IPO. Accordingly, on June 30,March 31, 2021, offering costs
totaling $4,702,041$4,772,041 have been charged to shareholders’s
tock
holders’ equity (consisting of $4,000,000 of underwriting fees and $702,041$772,041 of other offering costs). Of the total transaction cost $228,331$233,453 was reclassed to expense as
a non-operating expense
in the statementsstatement of operations with the rest of the offering cost charged to shareholders’s
tock
holders’ equity. The transaction costs were allocated based on the relative fair value basis, compared to the total offering proceeds, between the fair value of the public warrant liabilities and the Class A ordinary shares.
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheet.
Derivative Warrant liabilitiesFinancial Instruments
The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including issued stock purchase 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 Company accounts for its 11,000,000
 ordinary share Warrants issued in connection with its IPO (
6,666,666
) and Private Placement (
4,333,334
) as derivative warrant liabilities in accordance with ASC 815-40.ASC815-40. Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and adjusts the instruments to fair value at each reporting period. The liabilities are subject to re-measurementtore-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s statementsstatement of operations. The fair value of Warrants issued by the Company in connection with the Public Offering and Private Placement has been estimated using Monte-Carlo simulations as of the initial measurement date, and for the Private Placement Warrants, as of subsequent measurement dates (see Note 10)1
1
). 
The Company granted the underwriters a
45-day
option at the Initial Public Offering date to purchase up to 3,000,000 additional Units to cover over-allotments. The over-allotment option was evaluated under ASC 480 “Distinguishing Liabilities from Equity.” The Company concluded that the underlying transaction (Units which include redeemable shares and warrants) of the over-allotment option embodies an obligation to repurchase the issuer’s equity shares. Accordingly, the option was fair valued and recorded as a liability at issuance date with a change in fair value recorded at March 31, 2021 and the date at which the over-allotment option expired unexercised during the three months ended June 30, 2021.
Share-Based Compensation
The Company accounts for stock awards in accordance with ASC 718, “Compensation—Stock Compensation,” which requires that all equity awards be accounted for at their “fair value.” Fair value is measured on the grant date using a Monte-Carlo simulation approach and was determined by applying a discount based upon a) the probability of a successful business combination and b) the lack of marketability of the Founder Shares.
Costs equal to these fair values are recognized ratably over the requisite service period based on the number of awards that are expected to vest, or in the period of grant for awards that vest immediately and have no future service condition. For awards that vest over time, cumulative adjustments in later periods are recorded to the extent actual forfeitures differ from the Company’s initial estimates; previously recognized compensation cost is reversed if the service or performance conditions are not satisfied, and the award is forfeited.
Income Taxes
The Company accounts for income taxes under FASB ASC Topic 740, “Income Taxes” (“ASC 740”), 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.
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’s management determined that the Cayman Islands is the Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of June 30, 2021, there were 0 unrecognized tax benefits and 0 amounts accrued for interest and penalties. 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 considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the period presented.
 
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Recent Accounting
 Standards
Standards
In August 2020, the FASB issued Accounting Standards Update (“ASU”)
2020-06, Debt—
Debt — Debt with Conversion and Other Options (Subtopic
470-20)
and ASC
815-40 (“
(“ASU
2020-06”)
to simplify accounting for certain financial instruments. ASU
2020-06
eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU
2020-06
amends the diluted earnings per share guidance, including the requirement to use the
if-converted
method for all convertible instruments. ASU
2020-06
is effective January 1, 2022 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company is currently assessing the impact, if any, that ASU
2020-06
would have on its financial position, results of operations or cash flows.
Management does not believe that any other recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.
Note 4 — Initial Public Offering
Pursuant to the IPO, the Company sold 20,000,000 Units, at a price of $10.00 per Unit. Each Unit consists of one Class A ordinary share, par value $0.0001 per share, and one-third of one redeemable warrant (each, a “Public Warrant” and collectively, the “Public Warrants”). Each whole Public Warrant entitles the holder to purchase 1 Class A ordinary share at a price of $11.50 per share.
As of June 30, 2021, the Class A ordinary shares reflected on the balance sheet are reconciled in the following table:
Gross proceeds from IPO
  $200,000,000 
Less:
     
Proceeds allocated to Public Warrants
   (9,133,333) 
Proceeds allocated to Derivative Liability
   (10,676) 
Class A ordinary share issuance costs
   (4,538,588) 
Plus:
     
Accretion of carrying value to redemption value
   13,689,732 
   
 
 
 
Class A ordinary shares subject to possible redemption
  $200,007,135 
   
 
 
 
Note 5 — Related Party—Party — Private Placement Warrants
Simultaneously with the closing of the IPO, the Sponsor purchased an aggregate of 4,333,334 Private Placement Warrants at a price of $1.50 per warrant ($6,500,001 in the aggregate) (the “Private Placement”). Each Private Placement Warrant is exercisable to purchase one Class A ordinary share at a price of $11.50 per share. A portion of the purchase price of the Private Placement Warrants was added to the proceeds from the IPO to be held in the Trust Account.
The Private Placement Warrants will be identical to Public Warrants except that the Private Placement Warrants, so long as they are held by the Sponsor or its permitted transferees, (i) will not be redeemable by the Company, (ii) may not (including the Class A ordinary shares issuable upon exercise of these Private Placement Warrants), subject to certain limited exceptions, be transferred, assigned or sold by the holders until
 
30
 
days after the completion of the Company’s initial Business Combination, (iii) may be exercised by the holders on a cashless basis and (iv) (including the ordinary shares issuable upon exercise of these Warrants) will be entitled to certain registration rights.
If the Private Placement Warrants are held by holders other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by the holders on the same basis as the Public Warrants.
The Sponsor, officers and directors entered into a letter agreement with the Company, pursuant to which they agreed to waive their redemption rights with respect to any Founder Shares (as described in Note 7) and public shares held by them in connection with the completion of the initial Business Combination or certain amendments to the amended and restated memorandum and articles of association. In addition, the Sponsor, officers and directors agreed to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if the Company fails to complete the initial Business Combination within the prescribed time frame. However, if the Sponsor or any of the Company’s officers, directors or affiliates acquire public shares, they will be entitled to liquidating distributions from the Trust Account with respect to such public shares if the Company fails to complete the initial Business Combination within the prescribed time frame. In the event that the Company submits the initial Business Combination to the public shareholders for a vote, the Sponsor will agree to vote any Founder Shares held by it and any public shares purchased during or after the IPO in favor of the initial Business Combination and the officers and directors will also agree to vote any public shares purchased during or after the IPO in favor of the initial Business Combination.
Note 6 — Related Party Transactions
Founder Shares
On February 1, 2021, the Sponsor paid $25,000, or approximately $0.003 per share, to cover certain offering costs of the Company in consideration for 7,187,500 Class B ordinary shares, par value $0.0001
 per share (the “Founder Shares”). On March 22, 2021, we effected a share surrender resulting in our initial shareholders holding 5,750,000 Class B ordinary shares. On May 7, 2021, the underwriter of the IPO’s over-allotment option expired unexercised, resulting in the forfeiture of an additional 
750,000
 Founder Shares.
13

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The initial shareholders, officers and directors have agreed not to transfer or sell any of their Founder Shares until the earlier to occur of: (a) one year after the completion of the Company’s initial Business Combination and (b) subsequent to Company’s initial Business Combination, (x) if the closing price of the Company’s Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within
any 30-trading day
period commencing at least 150
 days after the Company’s initial Business Combination or (y) the date on which Company complete a liquidation, merger, share exchange or other similar transaction that results in all of the Company’s public shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property. The Private Placement Warrants and the respective Class A ordinary shares underlying such Warrants are not transferable or salable until 30 days after the completion of the Company’s initial Business Combination. The foregoing restrictions will not be applicable to transfers (a) to the Company’s officers or directors, any affiliates or family members of any of the Company’s officers or directors, any members or partners of the Sponsor or their affiliates, any affiliates of the Sponsor, or any employees of such affiliates; (b) in the case of an individual, by gift to a member of one of the individual’s immediate family or to a trust, the beneficiary of which is a member of the individual’s immediate family, an affiliate of such person or to a charitable organization; (c) in the case of an individual, by virtue of laws of descent and distribution upon death of the individual; (d) in the case of an individual, pursuant to a qualified domestic relations order; (e) by private sales or transfers made in connection with any forward purchase agreement or similar arrangement or in connection with the consummation of a Business Combination at prices no greater than the price at which the Founder Shares, Private Placement Warrants or Class A ordinary shares, as applicable, were originally purchased; (f) by virtue of the Sponsor’s organizational documents upon liquidation or dissolution of the Sponsor; (g) to the Company for no value for cancellation in connection with the consummation of the Company’s initial Business Combination; (h) in the event of the Company’s liquidation prior to the completion of the Company’s initial Business Combination; or (i) in the event of the Company’s completion of a liquidation, merger, share exchange or other similar transaction which results in all of the Company’s public shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property subsequent to the Company’s completion of the Company’s initial Business Combination; provided, however, that in the case of clauses (a) through (f) these permitted transferees must enter into a written agreement agreeing to be bound by these transfer restrictions and the other restrictions contained in the letter agreement. 
On March 12, 2021, the Company’s Sponsor transferred a total of 195,000 shares of Class B ordinary shares of the Company to various individuals at a price of $0.0035 per share. Gareth Penny received 100,000 shares, James Crawley received 35,000, Thando Mhlambiso received 30,000, and Ziyanda Ntshona received 30,000 shares, for a total of 195,000 Class B ordinary shares. Within each agreement that was executed with each individual, vesting provisions were defined for the transferred shares. Summarized, the provisions provided on the date of the Company’s IPO,
twenty-five
percent of the total transferred shares would vest, with an additional
twenty-five
percent vesting one year after the Company’s IPO date. The final
fifty percent
vests on the date the Company consummates its business combination.
The transfer of the Class B Ordinary shares is in the scope of FASB ASC Topic 718, “Compensation-Stock Compensation” (“ASC 718”). Under ASC 718, stock-based compensation associated with equity-classified awards is measured at fair value upon the grant date. The Founders Shares were granted subject to a performance condition (i.e., the occurrence of an Initial Public Offering and/or Business Combination). Compensation expense related to the Founders Shares is recognized only when the performance condition is probable of occurrence under the applicable accounting literature in this circumstance. See Note 10 for the Company’s vesting schedule and accounting treatment over the transferred Class B ordinary shares under ASC 718.
Promissory Note — Related Party
On February 1, 2021, the Company issued a promissory note (the “Note”) to the Sponsor, pursuant to which the Company may borrow up to an aggregate principal amount of $300,000. The Note
is non-interest bearing
and payable on the earlier of (i) December 31, 2021 or (ii) the IPO. As of the consummation of the IPO on March 25, 2021, the Company had borrowed $133,541 under the Note. On April 16, 2021, the Company repaid the Note in full. As of June 30, 2021, there is no balance owed on the Note and it is 0 longer available to be drawn upon.
Due to Related Party
The Sponsor and an affiliate of the Sponsor have charged the Company for support charges under the administrative support agreement and other reimbursable expenses incurred in connection the Company’s operations. As of June 30, 2021, the Company owed the Sponsor an aggregate of $64,768, comprised of administrative support fees of $30,000 and other reimbursements of $34,768.
Administrative Support Agreement
Commencing on the date of the IPO, the Company has agreed to pay the Sponsor a total of $10,000 per month for office space and administrative support services. Upon completion of the Initial Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees. For the three months ended June 30, 2021 and the period from January 27, 2021 (inception) to June 30, 2021, the Company incurred $30,000 and $32,000 of administrative support expense, respectively.
Working Capital Loans
In addition, in order to finance transaction costs in connection with a Business Combination, the initial shareholders or an affiliate of the initial shareholders or certain of the Company’s directors and officers 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 the proceeds held outside the Trust Account to repay the Working
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Table of Contents
Capital Loans, but no proceeds held in the Trust
Account
would be used to repay the Working Capital Loans. 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. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000
$1,500,000 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. As of June 30, 2021, the Company had 0 outstanding borrowings under the Working Capital Loans.

 
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Note 7 — Commitments & Contingencies
Registration Rights
The holders of the Founder Shares, Private Placement Warrants and any Warrants that may be issued on conversion of Working Capital Loans (and any Class A ordinary shares 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) will be entitled to registration rights pursuant to a registration rights agreement to be signed prior to or on the Effective Date requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to the Class A ordinary shares). The holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that the Company registers such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of the initial Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting and
 
Marketing Agreement
The Company has granted the underwriter
a 45-day option
from March 25, 2021 to purchase up to an additional 3,000,000 Units to cover over-allotments. On May 7, 2021, the underwriter’s over-allotment option expired unexercised.
On March 25, 2021, the Company paid a fixed underwriting discount of $0.20 per Unit, or $4,000,000
 in the aggregate. Additionally, the underwriter and TowerBrook Financial, L.P. will assist the Company in holding meetings with its stockholders to discuss the potential Business Combination and the target business’ attributes, introduce the Company to potential investors that are interested in purchasing the Company’s securities in connection with a Business Combination, assist the Company in obtaining
shareholder
approval for the Business Combination and assist the Company with its press releases and public filings in connection with the Business Combination, for which they will be entitled to a deferred marketing fee of 
3.5% ($7,000,000) of the gross proceeds of the IPO upon the completion of the Company’s initial Business Combination.
Note 8 — Shareholders’ Equity
Preference Shares
 — The Company is authorized to issue a total of
5,000,000
preference shares at par value of $0.0001 $
0.0001
each. At June 30, 2021, there were 0preference
0
preference shares issued or outstanding.
Class
 A Ordinary Shares
 — The Company is authorized to issue a total of 500,000,000 Class A ordinary shares at par value of $0.0001 each. At June 30, 2021, there were 1,449,9490 shares issued and outstanding (excluding 18,550,05120,000,000 shares subject to possible redemption).
Class
 B Ordinary Shares
 — The Company is authorized to issue a total of 50,000,000 Class B ordinary shares at par value of $0.0001 each. At June 30, 2021, there were 5,000,000 Class B ordinary shares issued or outstanding.
Ordinary shareholders of record are entitled to one vote for each share held on all matters to be voted on by shareholders. Except as described below, holders of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class on all matters submitted to a vote of the Company’s shareholders except as required by law. Unless specified in the Company’s amended and restated memorandum and articles of association, or as required by applicable provisions of the Companies Act (As Revised) of the Cayman Islands or applicable stock exchange rules, the affirmative vote of a simple majority of the Company’s ordinary shares that are voted is required to approve any such matter voted on by the Company’s shareholders. Approval of certain actions will require a special resolution under Cayman Islands law, and pursuant to the Company’s amended and restated memorandum and articles of association; such actions include amending the Company’s amended and restated memorandum and articles of association and approving a statutory merger or consolidation with another company. The Company’s board of directors is divided into three classes, each of which will generally serve for a term of three years with only one class of directors being elected in each year. There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the shares voted for the election of directors can elect all of the directors. The Company’s shareholders are entitled to receive ratable dividends when, as and if declared by the board of directors out of funds legally available therefor. Prior to the Company’s initial Business Combination, only holders of the Company’s Founder Shares will have the right to vote on the election of directors. Holders of the Company’s public shares will not be entitled to vote on the election of directors during such time. In addition, prior to the completion of an initial Business Combination, holders of the Company’s Founder Shares may by ordinary resolution remove a member of the board of directors for any reason. The provisions of the Company’s amended and restated memorandum and articles of association governing the appointment or removal of directors prior to the Company’s initial Business Combination may only be amended by a special resolution passed by not less
than two-thirds of
the Company’s ordinary shares who attend and vote at the Company’s shareholder meeting which shall include the affirmative vote of a simple majority of the Company’s Class B ordinary shares.
Note 9 — Warrants
Each whole
W
arrant Warrant entitles the holder to purchase one Class A ordinary share at a price
 of $11.50 $
11.50
per share, subject to adjustment as discussed
herein. In addition, if (x) the Company issues additional Class A ordinary shares 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
$9.20
per ordinary share (with such issue price
or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor
 
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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%
 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 the Class A ordinary shares during the
20
trading day period starting on the trading day prior to the day on which the Company consummates the initial Business Combination (such price, the “Market Value”) is below $9.20$
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 described below
under “—Redemption
of Warrants when the price per Class A ordinary share equals or exceeds $
18.00
”
and “—Redemption
of Warrants when the price per Class A ordinary shares equals or exceeds $
10.00
” 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 described below under
“
under“ —Redemption
of Warrants when the price per Class A ordinary share equals or exceeds $
10.00
” will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price. 
The Warrants will become exercisable on the later of 
12 months from the closing of the IPO or 30 days after the completion of its initial Business Combination and will expire five years after the completion of the Company’s initial Business Combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.
The Company has agreed that as soon as practicable, but in no event later than 20 business days after the closing of the initial Business Combination, the Company will use its commercially reasonable efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the Class A ordinary shares issuable upon exercise of the Warrants, and the Company will use its commercially reasonable efforts to cause the same to become effective within 60
 business days after the closing of the initial Business Combination, and to maintain the effectiveness of such registration statement and a current prospectus relating to those Class A ordinary shares until the Warrants expire or are redeemed, as specified in the warrant agreement; provided that if the Class A ordinary shares 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, the Company will not be required to file or maintain in effect a registration statement, but the Company will use its commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. If a registration statement covering the Class A ordinary shares issuable upon exercise of the Warrants is not effective by the 60th 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, but the Company will use its commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. In such event, each holder would pay the exercise price by surrendering the Warrants for that number of Class A ordinary shares equal to the lesser of (A) the quotient obtained by dividing (x) the product of the number of Class A ordinary shares underlying the Warrants, multiplied by the excess of the “fair market value” (as defined below) less the exercise price of the Warrants by (y) the fair market value and (B)
 
0.361. The “fair market value” shall mean the volume weighted average price of the Class A ordinary shares for the 10 trading days ending on the trading day prior to the date on which the notice of exercise is received by the warrant agent.
Redemption of Warrants
 when the price per Class
 A ordinary share equals or exceeds $18.00.
 Once the Warrants become exercisable, the Company may redeem the outstanding Warrants (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 to each Warrant holder; and
 
if, and only if, the closing price of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a Warrant as described under the heading “Description of Securities—Warrants—
Securities — Warrants — Public
 Shareholders’
Warrants—Anti-Dilution
 Adjustments”) for any 20 trading days within
a 30-trading day
period ending three trading days before the Company sends the notice of redemption to the Warrant holders.
The Company has established the last of the redemption criterion discussed above to prevent a redemption call unless there is at the time of the call a significant premium to the Warrant exercise price. If the foregoing conditions are satisfied and the Company issues a notice of redemption of the Warrants, each Warrant holder will be entitled to exercise his, her or its Warrant prior to the scheduled redemption date. However, the price of the Class A ordinary shares may fall below the
$18.00 redemption trigger price (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a Warrant as described under the heading “Description of Securities—Warrants—
Securities — Warrants — Public
 Shareholders’ Warrants—
Warrants — Anti-dilution
 Adjustments”) as well as the $11.50 (for whole shares) Warrant exercise price after the redemption notice is issued.
 
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Redemption of Warrants when the price per Class
 A ordinary share equals or exceeds $10.00
. Once the Warrants become exercisable, the Company may redeem the outstanding 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 the table sets forth ender “Description
“Description of Securities—Warrants—
Securities — Warrants — Public
 Shareholders’ Warrants” based on the redemption date and the “fair market value” of the
Class A ordinary shares (as defined above) except as otherwise described below; and
 
if, and only if, the closing price of the Class A ordinary shares equals or exceeds $10.00 per public share (as adjusted for adjustments to
the number of shares issuable upon exercise or the exercise price of a Warrant as described under the heading “Description of Securities—Warrants—
Securities
— Warrants — Public
 Shareholders’ Warrants—
Warrants — Anti-Dilution
 Adjustments”) for any 20 trading days within
the 30-trading day
period
ending three trading days before the Company sends the notice of redemption to the Warrant holders.
Note 10 — Fair Value
MeasurementsShare-Based Compensation
On March 12, 2021, the Company’s Sponsor transferred a total of 195,000 shares of Class B ordinary shares of the Company to individuals at a price of $0.0035 per share. Within each transfer agreement that was executed with each director, vesting provisions were defined for the transferred shares. Summarized, the provisions provided on the date of the Company’s IPO,
twenty-five
percent of the total transferred shares would vest, with an additional
twenty-five
percent vesting one year after the Company’s IPO date. The final
fifty percent
vests on the date the Company consummates its business combination.
The fair value of the Founder Shares on the grant date was $5.48 per share, based upon a valuation performed by the Company. The valuation performed by the Company determined the fair value of the shares on the date of grant by applying a discount based upon a) the probability of a successful business combination and b) the lack of marketability of the Founder Shares. The aggregate grant date fair value of the award amounted to $1,068,600, of which $267,150 was recorded as stock compensation expense during the period from January 27, 2021 (inception) through June 30, 2021, which represents the vesting of
twenty-five
percent of the transferred shares.
A summary of the restricted share award and restricted unit activity for period from January 27, 2021 (inception) through June 30, 2021 is as follows:
Number of
Shares
Granted on March 12, 2021
195,000
Forfeited
—  
Vested
(48,750) 
Unvested Outstanding at June 30, 2021
146,250
A summary vesting schedule for the Company’s transferred founder’s shares can be seen below:
   Amount
Vested		 
Amount vested on March 25, 2021, the Company’s IPO date (represents 25% of shares vested or 48,750 shares)
  $267,150 
Amount vesting on March��25, 2022, one year from the Company’s IPO date
     
(represents 25% of shares vested or 48,750 shares)
   267,150 
Amount vesting upon the Company’s consummation of a successful business combination (represents 50% of shares vested or 97,500 shares)
   534,300 
   
 
 
 
Total vesting amount
  $1,068,600 
   
 
 
 
Total unrecognized compensation expense related to unvested Founder Shares at June 30, 2021 amounted to $801,450 and is expected to be recognized once defined intervals within the executed transfer agreements are met, such as the consummation of a business combination.
Note 11 — 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
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 include:
 
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.
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The
following
table presents information about the Company’s assets that are measured at fair value on a recurring basis at June 30, 2021 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
 

  
June 30,
2021
   
Quoted
Prices In
Active
Markets
(Level 1)
   
Significant
Other
Observable
Inputs
(Level 2)
   
Significant
Other
Unobservable
Inputs
(Level 3)
 
  
June 30,

2021
   
Quoted

Prices In

Active

Markets

(Level 1)
   
Significant

Other

Observable

Inputs

(Level 2)
   
Significant

Other

Unobservable

Inputs

(Level 3)
 
Description
                        
U.S. government securities in Trust Account
  $200,007,135   $200,007,135    0      0     $200,007,135   $200,007,135    —      —   
  
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
 
Liabilities:
                        
Warrant liabilities - Public
   6,666,667    6,666,667    0      0   
Warrant liabilities - Private
   4,333,334    0      0      4,333,334 
Warrant liabilities — Public   6,666,667    6,666,667    —      —   
Warrant liabilities — Private   4,333,334    —      —      4,333,334 
  
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
 
Total

  $11,000,001   $6,666,667   $—     $4,333,334 
  $11,000,001   $6,666,667   $0     $4,333,334   
 
   
 
   
 
   
 
 
  
 
   
 
   
 
   
 
 
The Company utilized a Monte Carlo simulation model to value the Warrants at the initial measurement date and, for the Private Placement Warrants, at each subsequent reporting period, with changes in fair value recognized in the statements of operations. The estimated fair value of the warrant liability is determined using Level 3 inputs. Inherent in a binomial options pricing model are assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its ordinary shares based on historical volatility of comparable SPAC warrants that matches 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 to remain at zero.
The Company utilized a Black-Scholes Option Pricing model to value the over-allotment liability at the initial measurement and at each reporting period, with changes in fair value recognized in the statement of operations. The estimated fair value of the over-allotment liability is determined using Level 3 inputs. Inherent in an options pricing model are assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividend yield. The over-allotment option expired unexercised during the three months ended June 30, 2021, and as such, no liability existed as of June 30, 2021.
 
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As of June 30, 2021, the Company utilized the quoted market price for the fair value of the Public Warrants, and the public warrant liabilities were transferred to Level 1.
The aforementioned warrant liabilities and/or over-allotment liability are not subject to qualified hedge accounting.
The following table provides quantitative information regarding Level 3 fair value measurements:
 
   
At

March 25,

2021

(Initial

Measurement)
  
At

June 30,

2021
 
Share price
  $9.51  $9.68 
Strike price
  $11.50  $11.50 
Term (in years)
   5.00   5.00 
Volatility
   30.0%   15.0% 
Risk-free rate
   1.26%   1.13% 
Dividend yield
   0.0%   0.0% 
   
At
March 25,
2021
(Initial
Measurement)
  
At
June 30,
2021
 
Private Warrant Liability
   
Share price
  $9.51  $9.68 
Strike pric
e
  $11.50  $11.50 
Term (in years)
 �� 5.00   5.00 
Volatility
   30.0%   15.0% 
Risk-free rate
   1.26%   1.13% 
Dividend yield
   0.0%   0.0% 
 
        
Over-Allotment Liability
         
Unit price
  $9.75  $—   
Exercise price
  $10.00  $—   
Term (in years)
   0.12   —   
Volatility
   4.48%   —  % 
Risk-free rate
   0.025%   —  % 
Dividend yield
   0.0%   —  % 
The following table presents the changes in the fair value of Level 3
liabilities:
 
   
Warrant

Liabilities
 
Fair value as of January 27, 2021
  $0   
Initial measurement on March 25, 2021
   15,070,000 
Change in fair value
   (550,000) 
   
 
 
 
Fair value as of March 31, 2021
   14,520,000 
Change in fair value
   (3,519,999) 
Transfer of public warrant liabilities to Level 1
   (6,666,667) 
   
 
 
 
Fair value as of June 30, 2021
  $4,333,334 
   
 
 
 
   
Warrant
Liabilities
   
Over-Allotment

Liability
 
Fair value as of January 27, 2021
  $—    
$
 —
  
 
Initial measurement on March 25, 2021
   15,070,000   
 
10,676
 
Change in fair value
   (550,000)   
 
23,456
 
Fair value as of March 31, 2021
  
$
14,520,000  
$
 
34,132
 
Change in fair value
   (3,519,999)   
(34,132
)
 
Transfer of public warrant liabilities to Level 1
   (6,666,667)    — 
   
 
 
     
Fair value as of June 30, 2021
  $4,333,334  
$
 — 
   
 
 
     
Note 11 —   Subsequent Events
The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date that the financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.
 
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Results of Operations and Known Trends or Future Events
We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities, those necessary to prepare for our Initial Public Offering and identifying a target company for our initial Business Combination. We do not expect to generate any operating revenues until after completion of our initial Business Combination. We
generate non-operating income
in the form of interest income on cash and cash equivalents held in the Trust Account. We incur 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 period from January 27, 2021 (inception) through June 30, 2021, we had a net income of $3.5 million.$3,172,621. We recorded a gain on the change in fair value of warrants of $4.1 million,$4,069,999 and a change in value of over-allotment liability of $10,676, offset by $0.2 million$233,453 of offering costs allocated to warrants, $267,150 of stock compensation expense, and $0.3 million$414,586 of formation and operating costs consisting mostly of general and administrative expenses.
For the three months ended June 30, 2021, we had a net income of $3.2 million.$3,187,483. We recorded a gain on the change in fair value of warrants of $3.5 million,$3,519,999 and a change in fair value of over-allotment liability of $34,133, offset by $0.3 million$373,784 of formation and operating costs consisting mostly of general and administrative expenses.
As a result of the restatement described in Note 2 to the financial statements included herein, we have
re-evaluated
our application of ASC 718, “Compensation — Stock Compensation,” and note that the transfer of the Class B Ordinary shares is in the scope of ASC 718. We have, as such, recorded compensation expense related to the Founders Shares within our accompanying condensed financial statements.
In addition to our
re-evaluation
of ASC 718, we also
re-evaluated
our application of ASC 480, “Distinguishing Liabilities from Equity,” for the underwriter’s over-allotment option, of which we recorded a liability and changed in value of the over-allotment liability within the condensed financial statements.
Furthermore, we have analyzed the impacts of deferred legal fees that were not recorded in the original filing of the Form
10-Q
for the period ended June 30, 2021. These deferred legal fees have been recorded and are presented within the financial statements of this quarterly report.
We have also
re-evaluated
the classification of the ordinary shares and determined that the ordinary shares issued during the Initial Public Offering and pursuant to the exercise of the underwriters’ overallotment can be redeemed or become redeemable subject to the occurrence of future events considered outside the Company’s control under ASC
480-10-S99.
Therefore, we concluded that the carrying value should include all ordinary shares subject to possible redemption, resulting in the ordinary shares subject to possible redemption being classified as temporary equity in its entirety. As a result, we have noted a reclassification adjustment related to temporary equity and permanent equity. This resulted in an adjustment to the initial carrying value of the ordinary shares subject to possible redemption with the offset recorded to additional
paid-in
capital (to the extent available), retained earnings (accumulated deficit) and ordinary shares.
Lastly, in connection with the change in presentation for the ordinary shares subject to redemption, we also restated our earnings per share calculation to allocate net income (loss) evenly to ordinary shares subject to redemption and those that are not subject to redemption. This presentation contemplates a Business Combination as the most likely outcome, in which case, both classes of ordinary shares participate pro rata in the income (loss) of the Company.
Liquidity and Capital Resources
As of June 30, 2021, the Company had approximately $1.0 million$971,000 in its operating bank account and working capital of
approximately $1.1 million.
$935,000. All remaining cash held in the Trust Account is generally unavailable for the Company’s use, prior to an initial Business Combination, and is restricted for use either in a Business Combination or to redeem Class A ordinary shares. As of June 30, 2021, none of the amount in the Trust Account was available to be withdrawn as described above.
Through June 30, 2021, the Company’s liquidity needs were satisfied through receipt of $25,000 from the sale of the Founder Shares and the net proceeds from the consummation of the Private Placement not held in 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 officers and directors may, but are not obligated to, provide the Company with working capital loans. As of June 30, 2021, there were no amounts outstanding under any working capital loan.
Until consummation of our initial Business Combination, the Company will be using the funds not held in the Trust Account, and any additional Working Capital Loans (as defined in Note 6 to our financial statements) from the initial shareholders, the Company’s officers and directors, or their respective affiliates (which is described in Note 6 to our financial statements), for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the initial Business Combination.
The Company does not believe it will need to raise additional funds in order to meet the expenditures required for operating its business. However, if the Company’s estimates of the costs of
undertaking in-depth due
diligence and negotiating a Business Combination is less than the actual amount necessary to do so, the Company may have insufficient funds available to operate its business prior to the initial Business Combination. Moreover, the Company will need to raise additional capital through loans from its Sponsor, officers, directors, or third parties. None of the Sponsor, officers or directors are under any obligation to advance funds to, or to invest in, the Company. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of its business plan, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all.
Derivative Warrant Liabilities
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Contractual Obligations
WeOther than the below, we do not use derivative instrumentshave any long-term debt obligations, capital lease obligations, operating lease obligations, purchase obligations or long-term liabilities.
Administrative Services Agreement
Commencing on March 25, 2021, the date the Company’s securities were first listed on the Nasdaq through the earlier of consummation of the initial Business Combination or our liquidation, the Company began to hedge exposuresreimburse the Sponsor for office space, secretarial and administrative services provided to the Company in the amount of $10,000 per month.
Registration and Shareholder Rights
The holders of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of working capital loans (and any shares of ordinary share 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) will be entitled to registration rights pursuant to a registration rights agreement to be signed prior to or on the effective date of the Proposed Public Offering requiring us to register such securities for resale (in the case of the Founder Shares, only after conversion to shares of Class A ordinary stock). The holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our completion of the initial Business Combination and rights to require us to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that no sales of these securities will be effected until after the expiration of the applicable
lock-up
period, as described herein. We will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
We granted the underwriter
a 45-day option
from March 25, 2021 to purchase up to 3,000,000 additional Public Shares to cover over-allotments, if any, at the Initial Public Offering price less the underwriting discounts and commissions. On May 7, 2021, the underwriter’s over-allotment option expired unexercised.
The underwriter was paid a cash flow, market,underwriting discount of $0.20 per Unit, or foreign currency risks.$4,000,000 in the aggregate, paid upon the closing of the Initial Public Offering.
Marketing Agreement
The underwriter and Towerbook Financial, L.P., will assist the Company in holding meetings with its shareholders to discuss the potential Business Combination and the target business’ attributes, introduce the Company to potential investors that are interested in purchasing the Company’s securities in connection with a Business Combination, assist the Company in obtaining shareholder approval for the Business Combination and assist the Company with its press releases and public filings in connection with the Business Combination, for which they will be entitled to a deferred marketing fee of 3.5% ($7,000,000) of the gross proceeds of the IPO upon the completion of the Company’s initial Business Combination.
Critical Accounting Policies
Management’s discussion and analysis of our results of operations and liquidity and capital resources are based on our financial information. We evaluate alldescribe our significant accounting policies in Note 3 — Significant Accounting Policies, of the Notes to Financial Statements included in this Report. Our financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Certain of our accounting policies require that management apply significant judgments in defining the appropriate assumptions integral to financial estimates. On an ongoing basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure that our financial statements are presented fairly and in accordance with U.S. GAAP. Judgments are based on historical experience, terms of existing contracts, industry trends and information available from outside sources, as appropriate. However, by their nature, judgments are subject to an inherent degree of uncertainty, and, therefore, actual results could differ from our estimates
Use of Estimates
The preparation of our financial instruments, including issued stock purchase warrants,statements in conformity with GAAP requires us to determinemake 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 revenues and expenses during the reporting period.
Making estimates requires us 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 we considered in formulating its estimate, could change in the near term due to one or more future confirming events. One of the more significant accounting estimates included in these financial statements is the determination of the fair value of the warrant liabilities. Such estimates may be subject to change as more current information becomes available and, accordingly, the actual results could differ significantly from those estimates.
Class A Ordinary Shares Subject to Possible Redemption
All of the 20,000,000 Class A ordinary shares sold as part of the Units in the IPO contain a redemption feature which allows for the redemption of such public shares in connection with the Company’s liquidation or if such instruments are derivativesthere is a shareholder vote or contain features that qualifytender offer in connection with the Business Combination and in connection with certain amendments to the amended and restated memorandum and articles of association. In accordance with
ASC480-10-S99,
redemption provisions not solely within our control require ordinary shares subject to redemption to be classified outside of permanent equity. Therefore, all Class A ordinary shares have been classified outside of permanent equity.
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We recognize changes in redemption value immediately as embedded derivatives, pursuantthey occur and adjust the carrying value of redeemable ordinary shares to ASC 480 and ASC 815. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessedequal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid in capital to the extent available and accumulated deficit.
Warrant Liabilities
We account for the warrants issued an aggregate of 11,000,000 Warrants in connection with our Initial Public Offering and Private Placement, which are recognized as derivative liabilities in accordance with
the guidance contained in ASC 815-40.815 under which the warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly,
we recognizeclassify the Warrantswarrants as liabilities at their fair value using a Monte-Carlo simulation approach and adjust the instrumentswarrants to fair value at each reporting period. The liabilities areThis liability is subject to remeasurementtore-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’sour statements of operations. The fair value of Warrants issued in connection with our
Over-Allotment Liability
We granted the underwriters a
45-day
option at the Initial Public Offering date to purchase up to 3,000,000 additional Units to cover over-allotments. The over-allotment option was evaluated under ASC 480 “Distinguishing Liabilities from Equity.” We concluded that the underlying transaction (Units which include redeemable shares and Private Placement has been estimated using Monte Carlo simulationswarrants) of the over-allotment option embodies an obligation to repurchase the issuer’s equity shares. Accordingly, the option was fair valued and recorded as a liability at the initial measurementissuance date and for the Private Placement Warrants, as of each subsequent measurement date.
re-valued
at March 31, 2021. As of June 30, 2021, the over-allotment liability expired unexercised, and as such, the associate liability was written off.
Share-Based Compensation
The Company accounts for stock awards in accordance with ASC 718, “Compensation — Stock Compensation,” which requires that all equity awards be accounted for at their “fair value.” Fair value is measured on the date of grant by applying a discount based upon a) the probability of a successful business combination and b) the lack of marketability of the Founder Shares.
Costs equal to these fair values are recognized ratably over the requisite service period based on the number of awards that are expected to vest, or in the period of grant for awards that vest immediately and have no future service condition. For awards that vest over time, cumulative adjustments in later periods are recorded to the extent actual forfeitures differ from the Company’s initial estimates; previously recognized compensation cost is reversed if the service or performance conditions are not satisfied, and the award is forfeited.
Net Income Per Ordinary Share
We have two classes of shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Earnings and losses are shared pro rata between the two classes of shares. The 11,000,000 potential common shares for outstanding warrants to purchase our shares were excluded from diluted net income per share for the period from January 27, 2021 (inception) through June 30, 2021, because the warrants are contingently exercisable, and the contingencies have not yet been met. As a result, diluted net income per ordinary share is the same as basic net income per ordinary share for the periods presented.
Offering Costs
We comply with the requirements of FASB ASC
340-10-S99-1
and SEC Staff Accounting Bulletin Topic 5A, “Expenses of Offering.” Offering costs consist principally of professional and registration fees incurred through the balance sheet date that are related to the Public WarrantsOffering and that were charged to shareholders’ equity upon the completion of the IPO. Accordingly, on March 22, 2021, offering costs totaling $4,772,041 have been charged to shareholders’ equity (consisting of $4,000,000 of underwriting fees and $772,041 of other offering costs). Of the total transaction costs, $233,453 was reclassified to expense as a non-operating expense in the statement of operations, with the rest of the offering cost charged to temporary equity. The transaction costs were allocated based on the relative fair value basis, compared to the total offering proceeds, between the fair value of the public warrant liabilities and the Class A ordinary shares.
Recent Accounting Standards
In August 2020, the FASB issued Accounting Standards Update (“ASU”)
2020-06,
Debt—Debt with Conversion and Other Options (Subtopic
470-20)
and ASC
815-40
(“ASU
2020-06”)
to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are valued atindexed to and settled in an entity’s own equity. ASU2020-06 amends the quoted market price.diluted earnings per share guidance, including the requirement to use the
if-converted
method for all convertible instruments. ASU 2020- is effective for fiscal years beginning after December 15, 2023 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company is currently assessing the impact, if any, that ASU 2020-06 would have on its financial position, results of operations or cash flows.
Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our financial statements.
 
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are a smaller reporting company as defined by
Rule 12b-2 of
the Exchange Act and are not required to provide the information otherwise required under this item. As of June 30, 2021, we were not subject to any market or interest rate risk. Following the consummation of our Initial Public Offering, the net proceeds received into the Trust Account have been invested in U.S. government securities with a maturity of 185 days or less or in money market funds that meet certain conditions under
Rule 2a-7 under
the Investment Company Act, that invest only in direct U.S. government treasury obligations. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.
We have not engaged in any hedging activities since our inception and we do not expect to engage in any hedging activities with respect to the market risk to which we are exposed.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensurewith the objective of ensuring that information required to be disclosed in our reports filed or submitted under the Exchange Act, such as this Report, is recorded, processed, summarized, and reported within the time periodsperiod specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and proceduresare also designed to ensurewith the objective of ensuring that such information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.
As required by Rules
13a-15
and
15d-15
under Our management evaluated, with the Exchange Act,participation of our management carried out an evaluation ofprincipal executive officer and principal financial and accounting officer (our “Certifying Officers”), the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2021.2021, pursuant to Rule
13a-15(b)
under the Exchange Act. Based upon thisthat evaluation, and in light of the material weakness in internal controls described below, managementour Certifying Officers concluded that, during the period covered by this report,as of June 30, 2021, our disclosure controls and procedures (as defined in Rules
13a-15(e)
and
15d-
15(e) under the Exchange Act) were not effective. Ineffective due to the material weaknesses in our Quarterly Report for the quarter ending March 31, 2021, filed on Form 10-Q on June 1, 2021, we disclosed material weakness in internal controlcontrols over financial reporting relatedrelating to the classificationaccounting treatment and valuation for complex financial instruments as well as the financial statement close process as it relates to distinguishing between contingent and contractual arrangements as well as incorrect accounting for accruals.
In light of these material weaknesses, we have made control improvements, including enhancing the Company’s warrants as componentsefficacy of equity insteadour review processes to identify and appropriately apply applicable accounting requirements to better evaluate and understand the nuances of as liabilities. We noted that the events that led to the material weakness in the Company’s financial statements were due to new recommendations issued by the SEC on April 12, 2021, after the approval of the Form
8-K
and the audited balance sheet included therein by the board of directors of the Company on March 25, 2021, which have impacted the vast majority of blank check companies in a similar position to the Company. Management understands that the accounting standards applicablethat apply to the treatment and reporting of contingent and contractual arrangements, complex financial instruments and accrued liabilities in our financial statements are complexstatements. Our plans at this time also include providing enhanced access to accounting literature, research materials and has since the inception of the Company benefited from the support of experienceddocuments and increased communication among our management and third-party professionals with whom management has regularly consulted with respect towe consult regarding contingent and contractual arrangements, complex financial instruments and accrued liabilities accounting issues. Management intends to continue to further consult with such professionalsapplications. Furthermore, in connection with accounting matters. The Companylight of this material weakness, we performed additional analysis as deemed necessary to ensure that its unaudited interimour financial statements were prepared in accordance with GAAP. Accordingly, the Company’s management believes that the financial statements included in this Quarterly Report on Form
10-Q
present fairly in all material respects our financial position, results of operations and cash flows for the periodperiods presented. Upon further evaluation, dueWe continue to evaluate steps to remediate the eventsidentified material weakness. These remediation measures may be time consuming and costly and there is no assurance that led tothese initiatives will ultimately have the further Revision described above in Note 2B to these financial statements, impactintended effects.
We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the material weaknessdisclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our internal control has continued subsequent to filing our Quarterly Report fordeficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the quarter ending March 31, 2021 on
Form 10-Q.likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Changes in Internal Control over Financial Reporting
There wereExcept as noted above, there was no changeschange in our internal control over financial reporting (as such term is defined in Rules
13a-15(f)
and
15d-15(f)
of the Exchange Act) that occurred during the three monthsperiod ended June 30, 2021 covered by this Quarterly Report on Form
10-Q
that havehas materially affected, or areis reasonably likely to materially affect, our internal control over financial reporting. Management has identified
Management’s Report on Internal Controls Over Financial Reporting
This Report does not include a material weakness in internal controls related to the accounting for Warrants issued in connection with our Initial Public Offering, as described above. In response, we have devoted, and plan to continue to devote, significant effort and resources to the remediation and improvementreport of ourmanagement’s assessment regarding internal control over financial reporting. While we have processesreporting or an attestation report of our independent registered public accounting firm due to identify and appropriately apply applicable accounting requirements, we plan to further enhance our systema transition period established by rules of evaluating and implementing the complex accounting standards that apply to our financial statements. Our plans at this time include providing enhanced access to accounting literature, research materials and documents and increased communication among our personnel and third-party professionals with whom we consult regarding complex accounting issues.SEC for newly public companies.
 
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Table of Contents
PART II—II — OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 1A. Risk Factors
As of the date of this Quarterly Report on
Form 10-Q, there
have been no material changes to the risk factors disclosed in our final prospectus filed with the SEC on March 22, 2021. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Unregistered Sales of Equity Securities
On February 1, 2021, the Sponsor paid $25,000 to cover certain costs of the Company in consideration of 7,187,500 Class B ordinary shares, par value $0.0001 per share (the “Founder Shares”). On March 22, 2021, the Sponsor transferred an aggregate of 195,000 Founder Shares to the Company’s other initial shareholders. The issuance was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act. On March 22, 2021, the Company effected a share surrender resulting in our initial shareholders holding 5,750,000 Founder Shares. On May 7, 2021, the underwriter of the IPO’s over-allotment option expired unexercised, resulting in the forfeiture of an additional 750,000 Founder Shares.
Simultaneously with the closing of the Initial Public Offering on March 25, 2021, the Company completed the Private Placement of an aggregate of 4,333,334 Private Placement Warrants at a price of $1.50 per Private Placement Warrant to the Sponsor, generating proceeds of $6.5 million. The issuance was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.
Use of Proceeds
Of the gross proceeds received from the Initial Public Offering and the sale of the Private Placement Warrants, $200,000,000 was placed in the Trust Account. The net proceeds of the Initial Public Offering and certain proceeds from the sale of the Private Placement Warrants are invested in U.S. government treasury bills with a maturity of 180 days or less and in money market funds meeting certain conditions under
Rule 2a-7 under
the Investment Company Act which invest only in direct U.S. government treasury obligations.
On February 1, 2021, the Sponsor agreed to loan the Company an aggregate of up to $300,000 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 earlier of December 31, 2021, or the completion of the Initial Public Offering. The Company repaid the Note in full on April 16, 2021.
The underwriter of the Initial Public Offering and TowerBrook Financial, L.P. agreed to defer $7,000,000 in marketing fees that will be payable by the Company to the underwriter of the Initial Public Offering and TowerBrook Financial, L.P. upon and concurrently with the consummation of a Business Combination.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
 
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Table of Contents
Item 5. Other Information
Notice of Failure to Satisfy a Continued Listing Rule or Standard—Obligation to File Periodic Financial Reports.None
On May 28, 2021, the Company received a deficiency letter from The Nasdaq Stock Market LLC (“Nasdaq”) indicating that it is not in compliance with Section 5250(c)(1) of The Nasdaq Stock Market LLC Rules regarding the Qualification, Listing and Delisting of Companies (the “Nasdaq Listing Rules”) as a result of its failure to timely file its report on Form
10-Q
for the fiscal quarter ended June 30, 2021 (the “Form
10-Q”)
with the Securities and Exchange Commission (the “Commission”) through the Commission’s EDGAR System.
On April 12, 2021, the staff of the Commission issued a public statement entitled “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”)” (the “Statement”), which clarified guidance for all SPAC-related companies regarding the accounting and reporting of their warrants. The immediacy of the effective date of the new guidance set forth in the Statement has resulted in a significant number of SPACs
re-evaluating
the accounting treatment for their warrants with their professional advisors, including auditors and other advisors responsible for assisting SPACs in the preparation of financial statements. This, in turn, has resulted in the Company’s delay in preparing and finalizing its financial statements as of and for the quarter ended June 30, 2021 and filing its Form
10-Q
with the Commission by the prescribed deadline.
Under the Nasdaq Listing Rules, the Company has 60 calendar days from the date of the deficiency letter to submit to Nasdaq a plan to regain compliance with the Nasdaq Listing Rules. The Company has filed this Form
10-Q
to cure its filing deficiency and regain compliance with the Nasdaq Listing.
Item 6. Exhibits
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on
Form 10-Q.
 
No.
  
Description of Exhibit
31.1*  
Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*  
Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**  
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as added by Section 906 of the Sarbanes-Oxley Act of 2002
32.2**  
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as added by Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*  Inline XBRL Instance Document
101.CAL*  Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.SCH*  Inline XBRL Taxonomy Extension Schema Document
101.DEF*  Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*  Inline XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*  Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
* Filed herewith.
*
Filed herewith.
**
** These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
 
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on this 23rd14th day of August, 2021.July, 2022.
 
TB SA ACQUISITION CORP
  /s//s/ Andrew Rolfe
Name:
 Andrew Rolfe
Title:
 Chief Executive Officer
 (Principal Executive Officer)
  /s//s/ James Crawley
Name:
 James Crawley
Title:
 Chief Financial Officer
 (Principal Financial and
 Accounting Officer)
 
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