UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended

March 31, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to _____

Commission File Number: 001-40784

BANNER ACQUISITION CORP.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

86-2670267

(State or Other Jurisdiction

of Incorporation)

(I.R.S. Employer

Identification No.)

300 S 1350 E, 2nd Floor

Lehi, UT

84043

(Address of Principal Executive Offices)

(Zip Code)

(801) 447-1534

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☒ No ☐

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

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Units, each consisting of one share of Class A Common Stock, $0.0001 par value, and one-half of one redeemable warrant	BNNRU	The NASDAQ Stock Market LLC
Class A Common Stock, par value $0.0001 per share	BNNR	The NASDAQ Stock Market LLC
Warrants, each whole warrant exercisable for one share of Class A Common Stock at an exercise price of $11.50 per share	BNNRW	The NASDAQ Stock Market LLC

As of May 23, 2022, 15,700,000 shares of Class A common stock, par value $0.0001 per share, and 3,925,000 shares of Class B common stock, par value $0.0001 per share, were issued and outstanding, respectively.


		Page No.
PART I—FINANCIAL INFORMATION

Item 1.	Financial Statements	1

	Condensed Balance Sheets as of March 31, 2022 (Unaudited) and December 31, 2021 (Audited)	1

	Unaudited Condensed Statements of Operations for the three months ended March 31, 2022 and for the period from March 12, 2021 (inception) through March 31, 2021	2

	Unaudited Condensed Statements of Changes in Stockholders’ Equity (Deficit) for the three months ended March 31, 2022 and for the period from March 12, 2021 (inception) through March 31, 2021	3

	Unaudited Condensed Statements of Cash Flows for the three months ended March 31, 2022 and for the period from March 12, 2021 (inception) through March 31, 2021	4

	Notes to Unaudited Condensed Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21

Item 4.	Controls and Procedures	21

PART II—OTHER INFORMATION

Item 1.	Legal Proceedings	22

Item 1A.	Risk Factors	22

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22

Item 3.	Defaults Upon Senior Securities	23

Item 4.	Mine Safety Disclosures	23

Item 5.	Other Information	23

Item 6.	Exhibits	23


	MARCH 31, 2022		DECEMBER 31, 2021
	(Unaudited)		(Audited)
ASSETS
Cash and cash equivalents	$	962,557	$	1,384,587
Prepaid expenses		660,319		615,693
Total current assets		1,622,876		2,000,280
Cash held in Trust Account		158,584,366		158,573,777
Other assets		265,510		414,859
Total Assets	$	160,472,752	$	160,988,916

LIABILITIES, COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION, AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	137,129	$	108,885
Franchise tax payable		50,000		161,644
Accrued expenses		446,766		381,998
Total current liabilities		633,895		652,527
Deferred underwriting fees payable		5,495,000		5,495,000
Total liabilities		6,128,895		6,147,527

Commitments and Contingencies (Note 6)

Class A common stock subject to possible redemption, 15,700,000 shares at $10.10 per share as of March 31, 2022 and December 31, 2021		158,570,000		158,570,000

Stockholders’ deficit
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding		—		—
Class A common stock, $0.0001 par value; 200,000,000 shares authorized; none issued or outstanding (excluding 15,700,000 shares subject to possible redemption as of March 31, 2022 and December 31, 2021)		—		—
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 3,925,000 shares issued and outstanding as of March 31, 2022 and December 31, 2021		393		393
Additional paid-in capital		300		—
Accumulated deficit		(4,226,836)		(3,729,004)
Total stockholders’ deficit		(4,226,143)		(3,728,611)
Total Liabilities, Common Stock Subject to Possible Redemption, and Stockholders’ Deficit	$	160,472,752	$	160,988,916


			For The Period
	For The		From March 12,
	Three Months Ended		2021 (Inception) Through
	March 31,		March 31,
	2022		2021
Formation costs	$	—	$	10,000
General and administrative expenses		462,908		—
Franchise tax expenses		50,000		—
Loss from operations		(512,908)		(10,000)
Gain on marketable securities (net), dividends and interest, held in Trust Account		15,076		—
Net loss	$	(497,832)	$	(10,000)

Weighted average shares outstanding of Class A common stock subject to possible redemption, basic and diluted		15,700,000		—
Basic and diluted net loss per share, Class A subject to possible redemption	$	(0.03)	$	0.00
Weighted average shares outstanding of Class B non-redeemable common stock, basic and diluted		3,925,000		3,750,000
Basic and diluted net loss per share, Class B non-redeemable common stock	$	(0.03)	$	0.00


	Common Stock Subject to
	Possible Redemption			Common Stock			Additional				Total
	Class A			Class B			Paid-in		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Capital		Deficit		Deficit
Balance as of January 1, 2022 (audited)	15,700,000	$	158,570,000	3,925,000	$	393	$	—	$	(3,729,004)	$	(3,728,611)
Share based compensation to Directors	—		—	—		—		300		—		300
Net loss	—		—	—		—		—		(497,832)		(497,832)
Balance as of March 31, 2022 (unaudited)	15,700,000	$	158,570,000	3,925,000	$	393	$	300	$	(4,226,836)	$	(4,226,143)


			For The Period
			From March 12,
	For The Three		2021 (Inception)
	Months Ended		Through March
	March 31, 2022		31, 2021
Cash Flows from Operating Activities
Net loss	$	(497,832)	$	(10,000)
Adjustments to reconcile net loss to net cash used in operating activities:
Gain on marketable securities (net), dividends and interest, held in Trust Account		(15,076)		—
Formation and operating expenses paid in exchange for Founder Shares		—		10,000
Changes in operating assets and liabilities:
Prepaid and other assets		104,724		—
Accounts payable		28,244		—
Accrued expenses (including franchise tax payable)		(46,877)		—
Net cash used in operating activities		(426,817)		—
Cash Flows from investing activities
Withdrawal from Trust Account for tax payment		4,487		—
Net cash provided by investing activities		4,487		—
Cash Flows from Financing Activities
Proceeds from the sale of founder shares to directors		300
Net cash provided by financing activities		300		—

Net increase in cash		(422,030)		—
Cash — beginning of period		1,384,587		—
Cash — end of period	$	962,557	$	—

Supplemental disclosure of noncash investing and financing activities:
Offering costs included in accounts payable	$	—	$	25,000


Gross proceeds	$	157,000,000
Less:
Fair value of Public Warrants at issuance		(4,227,750)
Class A common stock issuance costs		(8,836,621)

Plus:
Re-measurement of carrying value to redemption value		14,634,371
Class A common stock subject to possible redemption	$	158,570,000


	Level 1		Level 2		Level 3		Total
Assets
Marketable securities held in Trust Account	$	158,584,366	$	—	$	—	$	158,584,366
Total assets	$	158,584,366	$	—	$	—	$	158,584,366

Exhibit Number		Description
3.1		Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-40784) filed with the SEC on September 10, 2021).

3.2		Bylaws (incorporated by reference to Exhibit 3.3 to the Company’s Registration Statement on Form S-1 (Commission File No. 333-257906), filed on July 15, 2021).

31.1*		Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**		Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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104*		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).


	BANNER ACQUISITION CORP.

	/s/ Tanner Ainge
	Name:	Tanner Ainge
	Title:	Chief Executive Officer

	/s/ Greg Woodward
	Name:	Greg Woodward
	Title:	Chief Financial Officer

SEC Form 10-Q filed by Banner Acquisition Corp.