Berenson Acquisition Corp. I - Quarter Report: 2022 September (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(MARK ONE)

For the quarterly period ended: September 30, 2022

OR

                    

                    

001-40843

 

BERENSON ACQUISITION CORP. I

(Exact name of registrant as specified in its charter)

 

935-7676

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) the Act:

BERENSON ACQUISITION CORP. I

10-Q

TABLE OF CONTENTS

 

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Berenson Acquisition Corp. I (the “Company”) was incorporated in Delaware on June 1, 2021. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses (a “Business Combination”). Although the Company is not limited to a particular industry or geographical location, the Company intends to focus its search on a target business operating in the software and technology-enabled services industry with a total enterprise value in excess of $1 billion.

As of September 30, 2022 and December 31, 2021, the Company had not commenced any operations. All activity through September 30, 2022 and December 31, 2021 relates to the Company’s formation and the initial public offering (the “Initial Public Offering”), which is described below. The Company does not intend to generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company intends to generate income in the form of interest income from the proceeds derived from the Initial Public Offering.

On September 27, 2021, the registration statement on Form (File relating to the Initial Public Offering was declared effective by the U.S. Securities and Exchange Commission (the “SEC”). On September 30, 2021, the Company consummated the Initial Public Offering of 25,000,000 units (the “Units”), with each unit consisting of one share of Class A common stock and of one redeemable warrant, each whole warrant entitling the holder thereof to purchase one share of Class A common stock at an exercise price of $11.50 per share, subject to adjustment. The Units were sold at an offering price of $10.00 per Unit, generating total gross proceeds of $250,000,000, which is described in Note 3.

Simultaneously with the consummation of the Initial Public Offering, the Company consummated the sale of 7,000,000 warrants (the “Private Placement Warrants”) at a price of $1.00 per Private Placement Warrant, in a private placement to Berenson SPAC Holdings I, LLC, a Delaware limited liability company (the “Sponsor”), generating gross proceeds of $7,000,000, which is described in Note 4.

On October 22, 2021, the underwriters of the Initial Public Offering partially exercised their over-allotment option and purchased 2,510,000 additional Units at $10.00 per Unit, generating additional gross proceeds of $25,100,000. In addition, on October 22, 2021, simultaneously with the partial exercise of the over-allotment option by the underwriters, the Sponsor purchased an additional 502,000 Private Placement Warrants at $1.00 per Private Placement Warrant, generating additional gross proceeds of $502,000.

Transaction costs amounted to $16,646,076, consisting of $5,502,000 of underwriting commissions, $9,628,500 of deferred underwriting commissions, $1,009,105 for the excess fair value of founder shares attributable to the anchor investors (see Note 4) and $506,471 of other offering costs.

A total of $275,100,000 (or $10.00 per Unit) of the net proceeds of the sale of the Units (including the partial exercise of the over-allotment option) in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”) with Continental Stock Transfer & Trust Company acting as trustee, located in the United States and invested only in U.S. “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), having a maturity of 185 days or less, or in money market funds meeting certain conditions under Rule under the Investment Company Act which invest only in direct U.S. government treasury obligations. 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 funds held in the Trust Account will not be released from the Trust Account until the earliest of: (i) the completion of an initial Business Combination, (ii) the redemption of any public shares properly tendered in connection with a stockholder vote to amend the Company’s amended and restated certificate of incorporation (a) to modify the substance or timing of the Company’s obligation to allow redemptions in connection with the Business Combination or to redeem 100% of its public shares if it does not complete its initial business combination by March 30, 2023 or (b) with respect to any other provision relating to stockholders’ rights or Business Combination activity, and (iii) the redemption of the Company’s public shares if it does not complete its initial business combination by March 30, 2023, subject to applicable law.

 

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The public shares are recorded at their redemption amount and classified as temporary equity at the balance sheet, in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity” (“ASC 480”)

As of September 30, 2022, the Company had $147, in cash and working capital of approximately $39,000 (without taking into account franchise tax obligations of $78,890 that may be paid using investment income earned in the Trust Account). The Company intends to use the funds held outside of 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, and structure, negotiate and complete an initial Business Combination.

In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors will loan the Company funds as may be required (“Working Capital Loans”). If the Company completes its Business Combination, it expects to repay any Working Capital Loans out of the proceeds of the Trust Account released to it. Otherwise, the Working Capital Loans may be repaid only out of funds held outside the Trust Account.

The Company’s liquidity needs prior to the consummation of the Initial Public Offering were satisfied through the payment of $25,000 from the Sponsor to purchase Founder Shares (as defined in Note 4), and loan proceeds from the Sponsor of $176,000 under an unsecured promissory note (as discussed in Note 4). The Company repaid the promissory note in full on September 30, 2021. The Company’s liquidity needs have been satisfied with the proceeds from the consummation of the Initial Public Offering and sale of the Private Placement Warrants held outside of the Trust Account.

The accompanying interim unaudited condensed financial statements are presented in U.S. dollars in conformity with accounting principles, generally accepted in the United States of America (“GAAP”) for financial information and pursuant to the rules and regulations of the SEC. Accordingly, since the accompanying interim unaudited financial statements are condensed, they do not include all of the information and footnotes required by GAAP. In the opinion of management, the interim unaudited financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results for the periods presented. Operating results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected through December 31, 2022.

The accompanying interim unaudited financial statements should be read in conjunction with the Company’s Annual Report on for the year ended December 31, 2021, filed with the SEC on March 31, 2022.

Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (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 Securities Exchange Act of 1934, as amended) 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 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.

 

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The preparation of financial statements in conformity with U.S. GAAP requires the Company’s 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 revenues and expenses during the reporting period.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Such estimates may be subject to change as more current information becomes available and, accordingly, the actual results could differ significantly from those estimates.

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash and cash equivalents. The Company did not have any cash equivalents as of September 30, 2022 and December 31, 2021.

At September 30, 2022 and December 31, 2021, the assets held in the Trust Account were held in money market funds which invest in U.S. Treasury securities.

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage limit of $250,000. At September 30, 2022 and December 31, 2021, the Company has not experienced losses on these accounts.

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”). approximates the carrying amounts represented in the balance sheet due to their short-term nature.

ASC 820 establishes a fair value hierarchy that prioritizes and ranks the level of observability of inputs used to measure investments at fair value. The observability of inputs is impacted by a number of factors, including the type of investment, characteristics specific to the investment, market conditions and other factors. 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).

Investments with readily available quoted prices or for which fair value can be measured from quoted prices in active markets will typically have a higher degree of input observability and a lesser degree of judgment applied in determining fair value.

 

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The Company evaluated the warrants and Private Placement Warrants (collectively, the “Warrant Securities”) in accordance with ASC Topic “Derivatives and Hedging — Contracts in Entity’s Own Equity” (“ASC and concluded that the Warrant Securities could not be accounted for as components of equity. As the Warrant Securities meet the definition of a derivative in accordance with ASC the Warrant Securities are recorded as derivative liabilities on the accompanying balance sheet and measured at fair value at inception (the closing date of the Initial Public Offering) and remeasured at each reporting date in accordance with ASC 820 with changes in fair value recognized in the accompanying statement of operations in the period of change.

The Company accounts for its shares of common stock subject to possible redemption in accordance with the guidance in ASC 480. In accordance with the SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC redemption provisions not solely within the Company’s control require common stock subject to redemption to be classified outside of permanent equity. Ordinary liquidation events, which involve the redemption and liquidation of all of the entity’s equity instruments, are excluded from the provisions of ASC 480.

All of the 27,510,000 shares of Class A common stock sold as part of the Units in the Initial Public Offering contain a redemption feature which allows for the redemption of such public shares in connection with the Company’s liquidation if there is a stockholder vote or tender offer in connection with a Business Combination and in connection with certain amendments to the Company’s amended and restated certificate of incorporation. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable shares of common stock to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock are affected by charges against additional capital and accumulated deficit.

The Company follows the asset and liability method of accounting for income taxes under FASB ASC Topic 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. Deferred tax assets were deemed immaterial as of September 30, 2022 and December 31, 2021.

FASB ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of September 30, 2022. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties as of September 30, 2022. 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 may be subject to potential examination by federal, state and city taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal, state and city tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. The Company is subject to income tax examinations by major taxing authorities since inception.

Net income per share is computed by dividing net income by the weighted average number of common shares outstanding for the period. The Company applies the method in calculating net income per share. The contractual formula utilized to calculate the redemption amount approximates fair value. The Class feature to redeem at fair value means that there is effectively only one class of common stock. Changes in fair value are not considered a dividend of the purposes of the numerator in the earnings per share calculation. Net income per share is computed by dividing the pro rata net income between the Class A common stock and the Class B common stock by the weighted average number of common stock outstanding for each period. The calculation of diluted income per share does not consider the effect of the warrants issued in connection with the Initial Public Offering since the exercise of the warrants is contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive. The warrants are exercisable for 21,257,000 shares of Class A common stock in the aggregate.

 

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The following table reflects the calculation of basic and diluted net income per share of common stock (in dollars, except per share amounts):

The Company accounts for stock-based compensation expense in accordance with 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 and recognized over the requisite service period. To the extent a stock-based award is subject to a performance condition, the amount of expense recorded in a given period, if any, reflects an assessment of the probability of achieving such performance condition, with compensation recognized once the event is deemed probable to occur. The fair value of equity awards has been estimated using a market approach. Forfeitures are recognized as incurred.

 

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, no stock-based compensation expense has been recognized. Stock-based compensation would be recognized at the date a Business Combination is considered probable (i.e., upon consummation of a Business Combination) in an amount equal to the number of Founder Shares that ultimately vest multiplied times the latest modification date fair value per share (unless subsequently modified) less the amount initially received for the purchase of the Founder Shares.

Pursuant to the Initial Public Offering, the Company sold 27,510,000 Units at a purchase price of $10.00 per Unit. Each Unit consists of one share of Class A common stock and of one redeemable warrant. Each whole warrant entitles the holder to purchase one share of Class A common stock at an exercise price of $11.50 per share. Only whole warrants may be exercised and no fractional warrants will be issued upon separation of the Units and only whole warrants will trade. The warrants will become exercisable on the later of 30 days after the completion of the Business Combination and 12 months from the closing date of the Initial Public Offering, and will expire five years after the completion of the Business Combination or earlier upon redemption or liquidation. Alternatively, if the Company does not complete a Business Combination within 18 months after the closing of the Initial Public Offering, the warrants will expire. If the Company is unable to deliver registered shares of Class A common stock to the holder upon exercise of warrants issued in connection with the 27,510,000 Units during the exercise period, the warrants will expire worthless, except to the extent that they may be exercised on a cashless basis in the circumstances described in the agreement governing the warrants.

Once the warrants become exercisable, the Company may redeem the outstanding warrants in whole, but not in part, at a price of $0.01 per warrants upon not less than 30 days’ prior written notice of redemption, and only in the event that the last sale price of the Company’s public shares equals or exceeds $18.00 per share for any 20 trading days within the day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to warrants holders. Additionally, 90 days after the warrants become exercisable, the Company may redeem the outstanding warrants in whole, but not in part, at a price of $0.10 per warrant provided that holders will be able to exercise their warrants prior to redemption and receive shares of Class A common stock at a price based on the redemption date and “fair market value” of the Company’s Class A common stock upon a minimum of 30 days’ prior written notice of redemption, and only in the event that the last sale price of the Company’s Class A common stock equals or exceeds $10.00 per share on the trade date prior to the date on which the Company sends the notice of redemption to the warrant holders. The “fair market value” of the Company’s Class A common stock shall mean the average reported last sale price of the Company’s Class A common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the warrant holders. The Company has agreed to use its commercially reasonable efforts to file a registration statement with the SEC for the Class A common stock issuable upon exercise of the warrants under the Securities Act as soon as practicable, but in no event later than 20 business days following the completion of a Business Combination.

Eleven qualified institutional buyers or institutional accredited investors which are not affiliated with the Company, the Sponsor, the Company’s directors, or any member of the Company’s management (the “anchor investors”), have each purchased Units in the Initial Public Offering at varying amounts not exceeding 9.9% of the units sold in the Initial Public Offering.

On June 25, 2021, the Sponsor purchased an aggregate of 7,187,500 Founder Shares for an aggregate purchase price of $25,000. In September 2021, the Sponsor transferred an aggregate of 25,000 founder shares (for a total of 125,000 founder shares) to each of its independent directors and special advisor at their original purchase price. Subsequently, on September 30, 2021, the Sponsor sold an aggregate of 1,872,159 Founder Shares to the anchor investors at their original purchase price. Following the expiration of the underwriter’s over-allotment option, on November 12, 2021 the Sponsor forfeited 310,000 Founder Shares. At September 30, 2022 and December 31, 2021, there were 6,877,500 Founder Shares issued and outstanding.

With certain limited exceptions, the Founder Shares are not transferable, assignable or salable by the initial stockholders until the earlier of (i) one year after the completion of an initial Business Combination and (ii) subsequent to the initial Business Combination, (a) if the last reported sale price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any day period commencing at least 150 days after the initial Business Combination, or (b) the date on which the Company completes a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all of its public stockholders having the right to exchange their shares of Class A common stock for cash, securities or other

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$13,610,087 or $7.274 per share. The estimated fair value was determined using the Company price per share less a discount for lack of marketability using a Finnerty Model. The excess of the fair value of the Founder Shares sold over the purchase price was determined to be an issuance cost of the Initial Public Offering incurred on the Company’s behalf. Accordingly, this issuance cost was accounted for as an equity contribution from the Sponsor.

Since a portion of the Initial Public Offering consisted of warrants that are accounted for as liabilities, a portion of the excess of fair value was expensed to the statement of operations.

Simultaneously with the consummation of the Initial Public Offering and the partial exercise by the underwriters of their over-allotment option, the Sponsor purchased from the Company 7,502,000 Private Placement Warrants at a price of $1.00 per warrant, or approximately $7,502,000, in private placements. Each Private Placement Warrant entitles the holder to purchase one share of Class A common stock at $11.50 per share, subject to adjustment. A portion of the purchase price of the Private Placement Warrants was added to the proceeds from the Initial Public Offering to be held in the Trust Account. The Private Placement Warrants will not be redeemable by the Company so long as they are held by the Sponsor or its permitted transferees. 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 warrants issued as part of the Units in the Initial Public Offering. The Sponsor, or its permitted transferees, will have the option to exercise the Private Placement Warrants on a cashless basis. In addition, the Private Placement Warrants (and the shares of Class A common stock issuable upon exercise of such Private Placement Warrants) will, subject to certain limited exceptions, be subject to transfer restrictions until 30 days after the completion of a Business Combination.

If the Company does not complete a Business Combination by March 30, 2023, the proceeds from the sale of the Private Placement Warrants held in the Trust Account will be used to fund the redemption of the Company’s public shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless.

In addition, in order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors will loan the Company the Working Capital Loans. If the Company completes its Business Combination, it expects to repay any Working Capital Loans out of the proceeds of the Trust Account released to it. Otherwise, the Working Capital Loans may be repaid only out of funds held outside the Trust Account. Up to $1,500,000 of Working Capital Loans may be convertible into warrants at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the Private Placement Warrants, including as to exercise price, exercisability and exercise period. The terms of the Working Capital Loans have not been determined and no written agreements exist with respect to such Working Capital Loans. As of September 30, 2022, there were no amounts outstanding under any Working Capital Loans.

The Company entered into an agreement with the Sponsor pursuant to which, commencing on September 28, 2021 through the earlier of the Company’s consummation of a Business Combination and its liquidation, to pay the Sponsor a total of up to $10,000 per month for office space, secretarial and administrative support. For the three and nine months ended September 30, 2022, the Company incurred $30,000 and $90,000, respectively for these services, which is included in accrued expenses in the accompanying balance sheet and general and administrative expenses in the accompanying statement of operations.

The Company is authorized to issue 1,000,000 shares of preferred stock, par value $0.0001 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. At September 30, 2022 and December 31, 2021, there were no shares of preferred stock issued or outstanding.

The Company is authorized to issue 200,000,000 shares of Class A common stock with a par value of $0.0001 per share. At September 30, 2022 and December 31, 2021, there were 27,510,000 shares of Class A common stock issued and outstanding, all of which were subject to possible redemption and were classified at their redemption value outside of stockholders’ deficit on the balance sheet.

 

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The Company is authorized to issue 20,000,000 shares of Class B common stock with a par value of $0.0001 per share. At September 30, 2022 and December 31, 2021, there were 6,877,500 shares of Class B common stock issued and outstanding.

Prior to a Business Combination, only holders of the Class B common stock have the right to vote on the election of directors and holders of a majority of the outstanding shares of our Class B common stock may remove members of the Company’s board of directors for any reason. Holders of shares of Class A common stock and Class B common stock will vote together as a single class on all other matters submitted to a stockholder vote except as required by law.

The shares of Class B common stock will automatically convert into shares of Class A common stock at the time of a Business Combination, or earlier at the option of the holder, on a basis, subject to adjustment. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts offered in the Initial Public Offering and related to the closing of a Business Combination, including pursuant to a specified future issuance, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of Class B common stock agree to waive such adjustment with respect to any such issuance or deemed issuance, including a specific future issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, on an basis, 20% of the aggregate number of all shares of common stock outstanding upon the completion of plus the aggregate number of shares of Class A common stock and equity-linked securities issued or deemed issued in connection with a Business Combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in a Business Combination and any private placement-equivalent warrants issued upon conversion of Working Capital Loans).

The fair value of the Company’s certain assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheet as of September 30, 2022 and December 31, 2021. The fair values of cash and cash equivalents, prepaid assets, accounts payable and accrued expenses are estimated to approximate the carrying values as of September 30, 2022 and December 31, 2021 due to the short maturities of such instruments.

 

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The valuation methodology used in the determination of the fair value of financial instruments for which Level 3 inputs were used at December 31, 2021 was a modified Black-Scholes valuation model using inputs such as exercise price, stock price, volatility, term, risk-free rate and dividend yield. The valuation methodology used at September 30, 2022 was based on quoted prices from a similar financial instrument in an active market.

Transfers to/from Levels 1, 2 and 3 are recognized at the end of the reporting period.

The following table presents a summary of the changes in fair value of the Private Placement Warrants, as of March 31, 2022.

 

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 Class A common stock issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of working capital loans and upon conversion of the founder shares) are entitled to registration rights pursuant to a registration rights agreement entered into in connection with the Initial Public Offering, requiring the Company to register such securities for resale (in the case of the founder shares, only after conversion to our Class A common stock). The holders of these securities are entitled to make up to three demands, excluding short form registration demands, that that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to other registration statements filed by the Company subsequent to its completion of the Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that the Company will not be required to effect or permit any registration or cause any registration statement filed under the Securities Act to become effective until termination of the applicable periods. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

The underwriters of the Initial Public Offering are entitled to a deferred underwriting commission of $9,628,500. Subject to the terms of the underwriting agreement of the Initial Public Offering, (i) the deferred underwriting commission will be placed in the Trust Account and released to the underwriters only upon the completion of a Business Combination and (ii) the deferred underwriting commission will be waived by the underwriters in the event that the Company does not complete a Business Combination.

NOTE 8—SUBSEQUENT EVENTS

In accordance with ASC 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred up to the date the audited 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 condensed financial statements.

On November 8, 2022, the Company filed a Preliminary Proxy Statement on Schedule 14A (the “Preliminary Proxy Statement”) relating to the special meeting of the stockholders that is anticipated to be held in 2022 to approve an amendment to the Company’s amended and restated certificate of incorporation which would, if implemented, allow the Company to extend the date by which it has to consummate a Business Combination (the “Extension”) for an additional six months, from March 30, 2023 to September 30, 2023, or such earlier date as determined by the Company’s board of directors (such later date, the “Extended Date,” and such proposal, the “Charter Amendment Proposal”).

The Company will also seek shareholder approval to amend the Investment Management Trust Agreement, dated as of September 27, 2021, by and between the Company and Continental Stock Transfer & Trust Company, to provide for the Extension to the Extended Date pursuant to the Charter Amendment (the “Trust Amendment Proposal”).

The Company will also seek shareholder approval for the adjournment of the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Charter Amendment Proposal and the Trust Amendment Proposal.

 

References in this Quarterly Report on Form (this “Quarterly Report”) to “we,” “us” or the “Company” refer to Berenson Acquisition Corp. I. References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to Berenson SPAC Holdings I, LLC. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the condensed financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation,

 

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statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of this Quarterly Report and our Annual Report of Form for the year ended December 31, 2021 filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 31, 2021. The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Overview

We are a blank check company incorporated on June 1, 2021 as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (a “Business Combination”). While we may pursue an initial business combination target in any industry or geographical location, we intend to focus our search on a target business operating in the software and technology-enabled services industry with a total enterprise value in excess of $1 billion.

On September 30, 2021, we consummated our initial public offering of securities (the “Initial Public Offering”) and simultaneous private placement (the “Private Placement”) of private placement warrants to the Sponsor, described below. We intend to effectuate our initial Business Combination using cash from the proceeds of our Initial Public Offering and Private Placement, our capital stock, debt or a combination of cash, stock and debt.

We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete our initial Business Combination will be successful.

Recent Developments

On November 8, 2022, the Company filed a Preliminary Proxy Statement on Schedule 14A relating to a special meeting of stockholders that is anticipated to be held in 2022 to approve an amendment to the Company’s amended and restated certificate of incorporation which would, if implemented, allow the Company to extend the date by which it has to consummate a Business Combination (the “Extension”) for an additional six months, from March 30, 2023 to September 30, 2023, or such earlier date as determined by the Company’s board of directors (such later date, the “Extended Date,” and such proposal, the “Charter Amendment Proposal”). The Company will also seek shareholder approval to amend the Investment Management Trust Agreement, dated as of September 27, 2021, by and between the Company and Continental Stock Transfer & Trust Company, to provide for the Extension to the Extended Date pursuant to the Charter Amendment (the “Trust Amendment Proposal”).

The Company will also seek shareholder approval for the adjournment of the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Charter Amendment Proposal and the Trust Amendment Proposal.

Results of Operations

We have neither engaged in any operations nor generated any revenues to date. Our only activities from inception through September 30, 2022 were organizational activities and those necessary to prepare for our Initial Public Offering, and since our Initial Public Offering, our activity has been limited to identifying a target company for a Business Combination. We do not expect to generate any operating revenues until after the completion of our initial Business Combination. We generate income in the form of interest income on marketable securities held in the trust account (the “Trust Account”) with Continental Stock Transfer & Trust Company acting as trustee, located in the United States, established for the benefit of our public stockholders. 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 in connection with searching for, and completing, our initial Business Combination.

For the three and nine months ended September 30, 2022, we had net income of $2,530,367 and $9,328,583, respectively, which consists of operating costs of $265,009 and $1,167,019, respectively, interest income of $1,152,824 and $1,550,650, respectively, income tax expense of $270,578 for the three and nine months ended September 30, 2022, and change in fair value of derivative warrant liabilities of $1,913,130 and $9,215,530, respectively.

Liquidity, Capital Resources and Going Concern

Until the consummation of our Initial Public Offering, our only source of liquidity was an initial purchase of shares of Class B common stock, par value $0.0001 per share (the “Founder Shares”), by the Sponsor and loans from the Sponsor.

On September 30, 2021, we consummated our Initial Public Offering of 25,000,000 units, at $10.00 per unit, generating gross proceeds of $250,000,000. Simultaneously with the consummation of our Initial Public Offering, we consummated the Private Placement of an aggregate of 7,000,000 private placement warrants to the Sponsor at a price of $1.00 per private placement warrants, generating gross proceeds of $7,000,000.

 

14

Off-Balance

Contractual Obligations

Critical Accounting Policies and Estimates

Net income (loss) Per Common Stock Shares

Common Stock Subject to Possible Redemption

480-10-S99,

Public Warrants and Private Placement Warrants

Evaluation of Disclosure Controls and Procedures

Changes in Internal Control over Financial Reporting

PART II—OTHER INFORMATION