References to the "Company," "our," "us" or "we" refer to Forbion European
Acquisition Corp. The following discussion and analysis of the Company's
financial condition and results of operations should be read in conjunction with
the unaudited condensed financial statements and the notes thereto contained
elsewhere in this report. Certain information contained in the discussion and
analysis set forth below includes forward-looking statements that involve risks
and uncertainties.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q includes forward-looking statements within
the meaning of Section 27A of the Securities Act, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We have
based these forward-looking statements on our current expectations and
projections about future events. These forward-looking statements are subject to
known and unknown risks, uncertainties and assumptions about us that may cause
our actual results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity, performance or
achievements expressed or implied by such forward-looking statements. In some
cases, you can identify forward-looking statements by terminology such as
"anticipate," "believe," "continue," "could," "estimate," "expect," "intend,"
"may," "might," "plan," "possible," "potential," "predict," "project," "should,"
"would" or the negative of such terms or other similar expressions. Factors that
might cause or contribute to such a discrepancy include, but are not limited to,
those described in our other Securities and Exchange Commission ("SEC") filings.
Overview
We are a blank check company incorporated on August 9, 2021 as a Cayman Islands
exempted company for the purpose of effecting a merger, share exchange, asset
acquisition, share purchase, reorganization or similar business combination with
one or more businesses or entities (the "Business Combination").
Our sponsor is Forbion Growth Sponsor FEAC I B.V., a Cayman Islands limited
liability company (the "Sponsor"). The registration statement for our IPO was
declared effective on December 9, 2021. On December 14, 2021, we commenced our
IPO of 11,000,000 units (or 12,650,000 units if the underwriters' over-allotment
option is exercised in full) at $10.00 per unit. On December 15, 2021, the
underwriters exercised their full over-allotment option and purchased the
additional Units available to them. Transaction costs related to the IPO
amounted to $5,602,513 consisting of $1,800,000 of underwriting commissions,
$3,150,000 of deferred underwriting commissions, and $652,513 of other offering
costs
Simultaneously with the consummation of the IPO, we consummated the private
placement of 4,700,000 warrants (or 5,195,000 warrants when the underwriters'
over-allotment option was fully exercised on December 15, 2021) (the "Private
Placement Warrants") to the Sponsor, at a price of $1.50 per Private Placement
Warrant in a private placement. The sale of the Private Placement warrants in
connection with the IPO and subsequent over-allotment option exercise generated
gross proceeds of $7,792,500
Upon the closing of the IPO on December 14, 2021, $113,492,500 from the net
proceeds of the sale of the Units in the IPO and the sale of the Private
Placement Warrants was deposited into a trust account (the "Trust Account").
This amount was comprised of $10.25 per Unit for the 11,000,000 Units sold in
the IPO in addition to a $742,500 deposit in advance from the Sponsor related to
the underwriters' exercise of the full over-allotment option which took place
the following day on December 15, 2021 (see Note 8). Following the closing of
the IPO and the exercise of the underwriters' full over-allotment option,
$129,662,500 ($10.25 per Unit) was held in the Trust Account and will only be
invested in United States "government securities" within the meaning of
Section 2(a)(16) of the Investment Company Act, having a maturity of 185 days or
less or in money market funds meeting certain conditions under Rule
2a-7
promulgated under the Investment Company Act which invest only in direct U.S.
government treasury obligations. Pursuant to the trust agreement, the trustee is
not permitted to invest in other securities or assets. Except with respect to
interest earned on the funds held in the Trust Account that may be released to
us to pay income taxes, if any, our amended and restated memorandum and articles
of association, as discussed below and subject to the requirements of law and
regulation, will provide that the proceeds from the IPO and the sale of the
Private Placement Warrants held in the Trust Account will not be released from
the Trust Account (1) to us, until the completion of the initial Business
Combination, or (2) to the Public Shareholders, until the earliest of (a) the
completion of the initial Business Combination, and then only in connection with
those Class A ordinary shares that such shareholders properly elected to redeem,
subject to the limitations described herein, (b) the redemption of any Public
Shares properly tendered in connection with a shareholder vote to amend our
amended and restated memorandum and articles of association (A) to modify the
substance or timing of our obligation to provide holders of the Class A ordinary
shares the right to have their shares redeemed in connection with the initial
Business Combination or to redeem 100% of the Public Shares if we do not
complete the initial Business Combination within the Combination Period or
(B) with respect to any other provision relating to the rights of holders of the
Class A ordinary shares, and (c) the redemption of the Public Shares if we have
not consummated our Business Combination within the Combination Period, subject
to applicable law. Public Shareholders who redeem their Class A ordinary shares
in connection with a shareholder vote described in clause (b) in the preceding
sentence shall not be entitled to funds from the Trust Account upon the
subsequent completion of an initial Business Combination or liquidation if we
have not consummated an initial Business Combination within the Combination
Period, with respect to such Class A ordinary shares so redeemed. The funds held
in the Trust Account could become subject to the claims of our creditors, if
any, which could have priority over the claims of the Public Shareholders. As it
is expected that we are and will continuously be considered a Dutch tax
resident, any redemption proceeds (including interest income on the trust
account) distributed to our shareholders in excess of the
paid-up
capital for Dutch tax purposes may be subject to 15% Dutch dividend withholding
tax.

                                       20

--------------------------------------------------------------------------------

Table of Contents


Our amended and restated memorandum and articles of association provides that we
will have only 18 months from the closing of the IPO (or up to 24 months from
the closing of this offering if we extend the period of time to consummate a
Business Combination, subject to the Sponsor depositing additional funds in the
Trust Account) (the "Combination Period") to consummate the initial Business
Combination. If we have not consummated an initial Business Combination within
the Combination Period, we will: (i) cease all operations except for the purpose
of winding up; (ii) as promptly as reasonably possible but not more than ten
business days thereafter, redeem the Public Shares, at a
per-share
price, payable in cash, equal to the aggregate amount then on deposit in the
Trust Account, including interest earned on the funds held in the Trust Account
and not previously released to us to pay our income taxes, if any (less up to
$100,000 of interest to pay dissolution expenses) divided by the number of the
then-outstanding Public Shares, which redemption will completely extinguish
Public Shareholders' rights as shareholders (including the right to receive
further liquidation distributions, if any); and (iii) as promptly as reasonably
possible following such redemption, subject to the approval of our remaining
shareholders and board of directors, liquidate and dissolve, subject in the case
of clauses (ii) and (iii), to our obligations under Cayman Islands law to
provide for claims of creditors and the requirements of other applicable law.
There will be no redemption rights or liquidating distributions with respect to
our warrants, which will expire worthless if we fail to consummate an initial
Business Combination within the Combination Period.
Liquidity and Capital Resources
Until the consummation of the IPO, our only source of liquidity was an initial
purchase of Class B ordinary shares, par value $0.0001 (the "Class B ordinary
shares"), by the Sponsor and loans from our Sponsor.
As of September 30, 2021, we had no cash and had deferred offering costs of
$354,615. Further, we expect to incur significant costs in the pursuit of our
initial Business Combination. We cannot assure you that our plans to complete
our initial Business Combination will be successful.
We intend to use substantially all of the funds held in the Trust Account,
including any amounts representing interest earned on the Trust Account,
excluding deferred underwriting commissions, to complete our initial Business
Combination. We may withdraw interest from the Trust Account to pay taxes, if
any. To the extent that our share capital or debt is used, in whole or in part,
as consideration to complete a Business Combination, the remaining proceeds held
in the Trust Account will be used as working capital to finance the operations
of the target business or businesses, make other acquisitions and pursue our
growth strategies.
We intend to use the funds held outside the Trust Account primarily to identify
and evaluate target businesses, perform business due diligence on prospective
target businesses, travel to and from the offices, plants or similar locations
of prospective target businesses or their representatives or owners, review
corporate documents and material agreements of prospective target businesses,
structure, negotiate and complete a Business Combination.
In order to fund working capital deficiencies or finance transaction costs in
connection with a Business Combination, our Sponsor or an affiliate of our
Sponsor or certain of our officers and directors may, but are not obligated to,
loan us funds as may be required. If we complete a Business Combination, we may
repay such loaned amounts out of the proceeds of the Trust Account released to
us. In the event that a Business Combination does not close, we may use a
portion of the working capital held outside the Trust Account to repay such
loaned amounts, but no proceeds from our Trust Account would be used for such
repayment. Up to $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 at the option of the lender. The warrants would be identical to the
Private Placement Warrants. As of September 30, 2021, we did not have any
outstanding working capital loans.
We do not believe we will need to raise additional funds in order to meet the
expenditures required for operating our business. However, if our estimate of
the costs of identifying a target business, undertaking in-depth due diligence
and negotiating a Business Combination are less than the actual amount necessary
to do so, we may have insufficient funds available to operate our business prior
to our initial Business Combination. Moreover, we may need to obtain additional
financing either to complete our initial Business Combination or redeem a
significant number of our Public Shares upon completion of our initial Business
Combination, in which case we may issue additional securities or incur debt in
connection with such Business Combination.
Results of Operations
As of September 30, 2021, we had not commenced any operations. All activity for
the period from August 9, 2021 (inception) through September 30, 2021 relates to
our formation and the IPO. We have neither engaged in any operations nor
generated any revenues to date. We will not generate any operating revenues
until after the completion of our initial Business Combination, at the earliest.
We will generate
non-operating
income in the form of interest income on cash and cash equivalents from the
proceeds derived from the IPO. We expect to incur increased expenses as a result
of being a public company (for legal, financial reporting, accounting and
auditing compliance), as well as for due diligence expenses.
For the period from August 9, 2021 (inception) to September 30, 2021, we had net
loss of $10,741, which consisted of formation costs.

                                       21
--------------------------------------------------------------------------------
  Table of Contents
Contractual Obligations
We do not have any long-term debt obligations, capital lease obligations,
operating lease obligations, purchase obligations or long-term liabilities.
Office Space, Secretarial and Administrative Services
Commencing on December 9, 2021, the date that our securities are first listed on
the NASDAQ, through the earlier of the consummation of the initial Business
Combination and the liquidation, we agreed to pay the Sponsor a total of $10,000
per month for office space, utilities, secretarial and administrative support
and to reimburse the Sponsor for any
out-of-pocket
expenses related to identifying, investigating and completing an initial
Business Combination.
Additionally, the Sponsor has agreed to pay an annual salary of $25,000 to each
of the independent Board Members for services rendered prior to or in connection
with the completion of the Business Combination. Board members are entitled to
reimbursement for any
out-of-pocket
expenses related to identifying, investigating, negotiating and completing the
Business Combination as well.
Underwriting Agreement
The underwriters were granted a
45-day
option from the date of the IPO to purchase up to an additional 1,650,000 Units
to cover over-allotments, if any. On December 15, 2021, the underwriters fully
exercised the over-allotment option.
The underwriters were paid underwriting commission of $0.20 per Unit sold in the
IPO, excluding Units sold to the anchor investor, or $1,800,000, upon the
closing of the IPO. Following the exercise of the underwriters' over-allotment
option on December 15, 2021, the underwriters earned an additional $330,000 for
an aggregate of $2,130,000 in underwriting commissions related to the IPO and
over-allotment.
In addition, $3,150,000 is payable to the underwriters for deferred underwriting
commissions related to the Units sold in the IPO, excluding those Units sold to
the anchor investor. Following the exercise of the underwriters' over-allotment
option on December 15, 2021, the underwriters earned an additional $577,500 for
an aggregate of $3,727,500 in deferred underwriting commissions related to the
IPO and over-allotment. The deferred underwriting commission will become payable
to the underwriters from the amounts held in the Trust Account solely in the
event that the Company completes a Business Combination, subject to the terms of
the underwriting agreement.
Forward Purchase Agreements
We have entered into two forward purchase agreements with an affiliate of the
Sponsor (the "FPA Purchaser"), pursuant to which the FPA Purchaser has agreed to
purchase (1) an aggregate of 1,000,000 Class A ordinary shares for $10.00 per
share (the "firm forward purchase shares"), or an aggregate amount of
$10,000,000 and (2) in addition, an aggregate of up to 1,000,000 Class A
ordinary shares for $10.00 per share (the "additional forward purchase shares"),
or an aggregate maximum amount of up to $10,000,000, in each case in a private
placement that may close simultaneously with the closing of the Company's
initial Business Combination.

                                       22
--------------------------------------------------------------------------------
  Table of Contents
Critical Accounting Policies
Offering Costs associated with the IPO
Offering costs consist of underwriting, legal, accounting and other expenses
incurred through the balance sheet date that are directly related to the IPO. We
comply with the requirements of the ASC
340-10-S99-1.
Offering costs are allocated ratably with the redeemable and
non-redeemable
shares they are allocated to. Upon initial closing of the IPO on December 14,
2021, offering costs associated with warrant liabilities are expensed, and
offering costs associated with the Class A ordinary shares are charged to
shareholders' equity. We incurred offering costs amounting to $5,602,513
consisting of $1,800,000 of underwriting commissions, $3,150,000 of deferred
underwriting commissions, and $652,513 of other offering costs.
Ordinary Shares Subject to Possible Redemption
We account for ordinary shares subject to possible redemption in accordance with
the guidance in ASC Topic 480 "Distinguishing Liabilities from Equity." Ordinary
shares subject to mandatory redemption (if any) are classified as a liability
instrument and measured at fair value. Conditionally redeemable ordinary shares
(including ordinary shares that feature redemption rights that are either within
the control of the holder or subject to redemption upon the occurrence of
uncertain events not solely within our control) are classified as temporary
equity. At all other times, ordinary shares are classified as shareholders'
equity. Our Class A ordinary shares feature certain redemption rights that are
considered to be outside of our control and subject to the occurrence of
uncertain future events. Accordingly, 11,000,000 Class A ordinary shares subject
to possible redemption (12,650,000 Class A ordinary shares subject to possible
redemption following the full exercise of the underwriters' over-allotment
option on December 15, 2021) are presented at redemption value as temporary
equity, outside of the shareholders' equity section of our balance sheet.
We recognize changes in redemption value immediately as they occur and adjusts
the carrying value of Class A 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 and accumulated deficit.
Net Loss Per Share
Net loss per share is computed by dividing net loss by the weighted average
number of ordinary shares outstanding during the period, excluding ordinary
shares subject to forfeiture by the Sponsor. Weighted average shares were
reduced for the effect of an aggregate of 412,500 ordinary shares that were
subject to forfeiture if the over-allotment option was not exercised by the
underwriters. At September 30, 2021, we did not have any dilutive securities and
other contracts that could, potentially, be exercised or converted into ordinary
shares and then share in our earnings. As a result, diluted loss per share is
the same as basic loss per share for the period presented.
Recent Accounting Pronouncements
In August 2020, the Financial Accounting Standards Board ("FASB") issued
Accounting Standards Update ("ASU") 2020-06, Debt-Debt with Conversion and Other
Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own
Equity (Subtopic 815-40) ("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
.
Off-Balance Sheet Arrangements
As of September 30, 2021, we did not have any off-balance sheet arrangements as
defined in Item 303(a)(4)(ii) of Regulation
S-K.
Inflation
We do not believe that inflation had a material impact on our business, revenues
or operating results during the period presented.
Emerging Growth Company Status
We are an "emerging growth company," as defined in Section 2(a) of the
Securities Act, as modified by the Jumpstart our Business Startups Act of 2012,
(the "JOBS Act"), and it may take advantage of certain exemptions from various
reporting requirements that are applicable to other public companies that are
not emerging growth companies including, but not limited to, not being required
to comply with the auditor attestation requirements of Section 404 of the
Sarbanes-Oxley Act, reduced disclosure obligations regarding executive
compensation in our periodic reports and proxy statements, and exemptions from
the requirements of holding a nonbinding advisory vote on executive compensation
and stockholder approval of any golden parachute payments not previously
approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies
from being required to comply with new or revised financial accounting standards
until private companies (that is, those that have not had a Securities Act
registration statement declared effective or do not have a class of securities
registered under the Exchange Act) are required to comply with the new or
revised financial accounting standards. The JOBS Act provides that a 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. We have 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, us, 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
our 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.
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.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are designed to ensure that information
required to be disclosed by us in our Exchange Act reports is recorded,
processed, summarized, and reported within the time periods specified in the
SEC's rules and forms, and that such information is accumulated and communicated
to our management, including our principal executive officer and principal
financial officer or persons performing similar functions, as appropriate to
allow timely decisions regarding required disclosure.
Under the supervision and with the participation of our principal executive
officer and principal financial officer, we conducted an evaluation of the
effectiveness of our disclosure controls and procedures as of September 30,
2021, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the
Exchange Act. Based on this evaluation, our principal executive officer and
principal financial officer concluded that during the period covered by this
report, our disclosure controls and procedures were effective.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting that
occurred from August 9, 2021 (inception) through September 30, 2021 covered by
this Quarterly Report on Form 10-Q that has materially affected, or is
reasonably likely to materially affect, our internal control over financial
reporting.

                                       23

--------------------------------------------------------------------------------

Table of Contents

© Edgar Online, source Glimpses