References to the "Company," "our," "us" or "we" refer to
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 otherSecurities and Exchange Commission ("SEC") filings.
Overview
We are a blank check company incorporated as a
Our sponsor isForbion Growth Sponsor FEAC I B.V. , aCayman Islands limited liability company (the "Sponsor"). The registration statement for our initial public offering was declared effective onDecember 9, 2021 . OnDecember 14, 2021 , the Company's commenced the 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 (the "Units"), which is discussed in Note 3. Each Unit consists of one Class A ordinary share and one-third of one redeemable warrant (the "Public Warrants"). Each whole warrant entitles the holder to purchase one Class A ordinary share at a price of$11.50 per share. OnDecember 15, 2021 , the underwriters exercised their full over-allotment option and purchased the additional Units available to them. The aggregate Units sold in the IPO and subsequent over-allotment were 12,650,000 and generated gross proceeds of$126,500,000 .
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
Our transaction costs related to the IPO amounted to
On
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The underwriters' exercise of their full over-allotment option generated an
additional
Following the closing of the exercise of the underwriters' full over-allotment
option, an additional
Our management has broad discretion with respect to the specific application of the net proceeds of the IPO and the sale of Private Placement Units, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination.
We must complete one or more initial Business Combinations having an aggregate fair market value of at least 80% of the net assets held in the Trust Account (as defined below) (excluding the deferred underwriting commissions and taxes payable on the interest earned on the Trust Account) at the time of signing a definitive agreement in connection with the initial Business Combination. However, we will complete the initial Business Combination only if the post-Business Combination company in which its public shareholders own shares will own or acquire 50% or more of the outstanding voting securities of the target or is otherwise not required to register as an investment company under the Investment Company Act (the "Investment Company Act"). There is no assurance that we will be able to complete a Business Combination successfully.
Following the closing of the IPO onDecember 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 additional 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 onDecember 15, 2021 . 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 inUnited 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 directU.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 the Company to pay its income taxes, if any, the Company's 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 Public Offering and the sale of the Private Placement Warrants held in the Trust Account will not be released from the Trust Account (1) to the Company, until the completion of the initial Business Combination, or (2) to its 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 the Company's amended and restated memorandum and articles of association (A) to modify the substance or timing of the Company's 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 the Company does not complete the initial Business Combination within 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 the Company has not consummated the Company's Business Combination within 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 the Company has not consummated an initial Business Combination within 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 the Company's creditors, if any, which could have priority over the claims of its 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
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We will provide holders (the "Public Shareholders") of its Class A ordinary
shares, par value
We will provide its public shareholders with the opportunity to redeem all or a
portion of their Class A ordinary shares upon the completion of the initial
Business Combination, regardless of whether such shareholder votes on such
proposed Business Combination, and if they do vote, regardless of whether they
vote for or against such proposed Business Combination, at
a per-share price, payable in
cash, equal to the aggregate amount then on deposit in the Trust Account
calculated as of two business days prior to the consummation of the initial
Business Combination, including interest earned on the funds held in the Trust
Account and not previously released to the Company to pay its income taxes, if
any, divided by the number of then-outstanding public shares, subject to the
limitations described herein. The amount in the Trust Account is initially
anticipated to be
The per share amount that we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters. The redemption rights will include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. There will be no redemption rights upon the completion of the initial Business Combination with respect to the Company's warrants. Further, we will not proceed with redeeming the public shares, even if a public shareholder has properly elected to redeem its shares if a Business Combination does not close.
We have amended and restated memorandum and articles of association provides that the Company will have only 18 months from the closing of the Public Offering (or up to 24 months from the closing of this offering if the Company extends 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 its initial Business Combination. If the Company has not consummated an initial Business Combination within Combination Period, the Company will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its 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 the Company's remaining shareholders and its board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii), to the Company's obligations underCayman 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 the Company's warrants, which will expire worthless if the Company fails to consummate an initial Business Combination within Combination Period.
The Sponsor and each member of its management team have entered into an agreement with Company, pursuant to which they have agreed to (i) waive their redemption rights with respect to their Founder Shares (ii) to 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 memorandum and articles of association (A) that would modify the substance or timing of the Company's 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 the Company does not complete the initial Business Combination within Combination Period or (B) with respect to any other provision relating to the rights of holders of the Class A ordinary shares and (iii) waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares they hold if the Company fails to consummate an initial Business Combination within Combination Period (although they will be entitled to liquidating distributions from the Trust Account with respect to any public shares they hold if the Company fails to complete the initial Business Combination within the prescribed time frame).
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We have until 18 months from the closing of the Public Offering to complete a
Business Combination. However, if the Company anticipates that it may not be
able to consummate a Business Combination within 18 months, the Company may
extend the period of time to consummate a Business Combination by up to two
additional three-month periods (for a total of 24 months to complete a Business
Combination (the "Combination Period"). In order to extend the time available
for the Company to consummate a Business Combination, the Sponsor or its
affiliate or designees must deposit into the Trust Account, for each additional
three-month period,
Our Sponsor has agreed that it will be liable to the Company if and to the
extent any claims by a third party (other than the Company's independent
auditors) for services rendered or products sold to the Company, or a
prospective target business with which the Company has discussed entering into a
transaction agreement, reduce the amount of funds in the Trust Account to below
(1)
Results of Operations
As ofMarch 31, 2022 , we had not commenced any operations. All activity throughMarch 31, 2022 relates to our formation, IPO and identifying a business combination target. 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 and securities 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 three months ended
Liquidity, Capital Resources and Going Concern
The Company's liquidity needs up to
In connection with the Company's assessment of going concern considerations in accordance with FASB ASC 205-40, Presentation of Financial Statements-Going Concern", management has determined that the Company has and will continue to incur significant costs in pursuit of its acquisition plans which raises substantial doubt about the Company's ability to continue as a going concern. Moreover, we may need to obtain additional financing either to complete our initial Business Combination or because we become obligated to redeem a significant number of our Public Shares upon consummation of our initial Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our initial Business Combination. If we are unable to complete our initial Business Combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Accounts. In addition, following our initial Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
Further, management has determined that if the Company is unable to complete a
Business Combination by
Risks and Uncertainties
Management is currently evaluating the impact of the COVID-19 pandemic, rising
interest rates, inflation and the
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Table of Contents Related Party Transactions Founder Shares
On
Promissory Note -
OnAugust 12, 2021 ,Forbion European Sponsor LLP agreed to loan the Company up to$500,000 to be used for a portion of the expenses of the Public Offering. These loans are non-interest bearing, unsecured and are due at the earlier ofDecember 31, 2021 or the closing of the Public Offering. The loan was repaid out of the offering proceeds not held in the Trust Account. The Company had no outstanding borrowings under the promissory note as ofMarch 31, 2022 andDecember 31, 2021 .
Working Capital Loans
In order to finance transaction costs in connection with an intended Business
Combination, the Sponsor or an affiliate of the Sponsor, or certain of the
Company's officers and directors may, but are not obligated to, loan the Company
funds as may be required ("Working Capital Loans"). If the Company completes the
initial Business Combination, the Company may repay the Working Capital Loans
out of the proceeds of the Trust Account released to the Company. Otherwise, the
Working Capital Loans may be repaid only out of funds held outside the Trust
Account. In the event that the initial Business Combination does not close. The
Company may use a portion of the working capital held outside the Trust Account
to repay the Working Capital Loans but no proceeds from the Trust Account would
be used to repay the Working Capital Loans. Up to
Related Party Extension Loans
The Company may extend the period of time to consummate a Business Combination
by up to two additional three-month periods (for a total of 24 months to
complete a Business Combination). In order to extend the time available for the
Company to consummate a Business Combination, the Sponsor or its affiliates or
designees must deposit into the trust account, for each additional three-month
period,
Office Space, Secretarial and Administrative Services
Commencing on the date that the Company's securities are first listed on the NASDAQ through the earlier of consummation of the initial Business Combination and the liquidation, the Company 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. For the three months endedMarch 31, 2022 , the Company incurred$30,000 in expense for the administrative support services which are included in due to related party on balance sheets. AtMarch 31, 2022 andDecember 31, 2021 , the Company had accrued$37,097 and$7,097 , respectively, in administrative fees payable to the Sponsor in due to related party. 23
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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. For the three months endedMarch 31, 2022 , the Company incurred$18,493 for services rendered by the independent Board Members' which are included in due to related party on balance sheets. AtMarch 31, 2022 andDecember 31, 2021 , the Company had accrued$22,192 and$3,699 , respectively, in compensation expense to the independent board members in due to related party.
Contractual Obligations
We do not have any long-term debt obligations, capital lease obligations,
operating lease obligations, purchase obligations or long-term liabilities other
than the deferred commission fees, legal fees and related party payables of
Critical Accounting Policies and Estimates
Ordinary Shares Subject to Redemption
We account for our 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 the Company's control) are classified as temporary equity. At 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 be outside of the Company's control and subject to the occurrence of uncertain future events. Accordingly, 12,650,000 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.
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 Common Share
We comply with the accounting and disclosure requirements of FASB ASC Topic 260,
"Earnings Per Share." Net loss per common share is computed by dividing net loss
by the weighted average number of shares of common stock outstanding during the
period, excluding common stock subject to forfeiture. At
Recent Accounting Pronouncements
InAugust 2020 , the FASB issued ASU Topic 2020-06, "Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity" ("ASU 2020-06"), which simplifies accounting for convertible instruments by removing major separation models required under current US GAAP. ASU 2020-06 also removes certain settlement conditions that are required for equity-linked contracts to qualify for scope exception, and it simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effectiveJanuary 1, 2022 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning onJanuary 1, 2021 . The Company adopted ASU 2020-06 effectiveJanuary 1, 2021 . The adoption of ASU 2020-06 did not have an impact on the Company's financial statements.
The Company's management does not believe that any other recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the accompanying condensed financial statements.
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Table of Contents Off-Balance Sheet Arrangements As ofMarch 31, 2022 , we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.
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