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 June 30, 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: 001-39847

POWERED BRANDS

(Exact name of registrant as specified in its charter)

Cayman Islands

98-1570855

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification Number)

292 Madison Avenue, 8th Floor

New York, NY

10017

(Address of principal executive offices)

(Zip Code)

(212) 756-3508

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Units, each consisting of one Class A ordinary share and one-third of a Warrant to acquire one Class A ordinary share	POWRU	The NASDAQ Capital Market
Class A ordinary shares, par value $0.0001	POW	The NASDAQ Capital Market
Warrants, each whole warrant exercisable for one Class A ordinary share at an exercise price of $11.50	POWRW	The NASDAQ Capital Market

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, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


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

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

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

As of August 9, 2022, 2,959,706 units, each consisting of one Class A ordinary share, par value $0.0001 per share, and one-third of a warrant to acquire one Class A ordinary share, 24,640,294 Class A ordinary shares, 6,900,000 Class B ordinary shares, par value $0.0001 per share, and 13,578,477 warrants were issued and outstanding.

Table of Contents

POWERED BRANDS

Quarterly Report on Form 10-Q

Table of Contents


		Page No.
PART I. FINANCIAL INFORMATION
Item 1.	Condensed Financial Statements	1
	Condensed Balance Sheets as of June 30, 2022 (unaudited) and December 31, 2021	1
	Unaudited Condensed Statements of Operations for the Three and Six Months Ended June 30, 2022 and 2021	2
	Unaudited Condensed Statements of Changes in Shareholders’ Deficit for the Three and Six Months Ended June 30, 2022 and 2021	3
	Unaudited Condensed Statements of Cash Flows for the Six Months Ended June 30, 2022 and 2021	4
	Notes to Unaudited Condensed Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4.	Controls and Procedures	23
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	24
Item 1A.	Risk Factors	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities	25
Item 3.	Defaults Upon Senior Securities	25
Item 4.	Mine Safety Disclosures	25
Item 5.	Other Information	25
Item 6.	Exhibits	26
SIGNATURES		27

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PART I - FINANCIAL INFORMATION

Item 1. Condensed Financial Statements.

POWERED BRANDS

CONDENSED BALANCE SHEETS


	June 30, 2022		December 31, 2021
	(unaudited)
Assets:
Current assets:
Cash	$	235,346	$	628,620
Prepaid expenses		184,683		294,862
Total current assets		420,029		923,482
Investments held in Trust Account		276,401,443		276,026,243
Total Assets	$	276,821,472	$	276,949,725

Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit:
Current liabilities:
Accounts payable	$	195,633	$	145,534
Accrued expenses		208,395		126,603
Due to related party		37,950		—
Total current liabilities		441,978		272,137
Deferred underwriting commissions		9,660,000		9,660,000
Derivative warrant liabilities		1,165,208		8,593,408
Total Liabilities		11,267,186		18,525,545

Commitments and Contingencies

Class A ordinary shares subject to possible redemption, $0.0001 par value; 27,600,000 shares issued and outstanding at $10.01 and $10.00 per share at redemption as of June 30, 2022 and December 31, 2021, respectively		276,301,443		276,000,000

Shareholders’ Deficit:
Preference shares, $0.0001 par value; 1,000,000 shares authorized; no shares issued or outstanding		—		—
Class A ordinary shares, $0.0001 par value; 350,000,000 shares authorized; no non-redeemable shares issued or outstanding		—		—
Class B ordinary shares, $0.0001 par value; 150,000,000 shares authorized; 6,900,000 shares issued and outstanding as of June 30, 2022 and December 31, 2021		690		690
Additional paid-in capital		—		—
Accumulated deficit		(10,747,847)		(17,576,510)
Total Shareholders’ Deficit		(10,747,157)		(17,575,820)
Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit	$	276,821,472	$	276,949,725

The accompanying notes are an integral part of these unaudited condensed financial statements.

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POWERED BRANDS

UNAUDITED CONDENSED STATEMENTS OF OPERATIONS


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2022		2021		2022		2021
General and administrative expenses	$	222,027	$	257,598	$	597,394	$	478,194
General and administrative expenses - related party		37,950		—		75,900		—
Loss from operations		(259,977)		(257,598)		(673,294)		(478,194)

Other income (expense)
Change in fair value of derivative warrant liabilities		3,786,926		(3,255,600)		7,428,200		(1,242,400)
Transaction costs associated with issuance of warrants		—		—		—		(479,738)
Income from investments held in Trust Account		350,594		6,882		375,200		12,327
Total other income (expense), net		4,137,520		(3,248,718)		7,803,400		(1,709,811)
Net income (loss)	$	3,877,543	$	(3,506,316)	$	7,130,106	$	(2,188,005)

Weighted average shares outstanding of Class A ordinary shares, basic and diluted		27,600,000		27,600,000		27,600,000		25,922,652
Basic and diluted net income (loss) per share, Class A ordinary shares	$	0.11	$	(0.10)	$	0.21	$	(0.07)

Weighted average shares outstanding of Class B ordinary shares, basic and diluted		6,900,000		6,900,000		6,900,000		6,845,304
Basic and diluted net income (loss) per share, Class B ordinary shares	$	0.11	$	(0.10)	$	0.21	$	(0.07)

The accompanying notes are an integral part of these unaudited condensed financial statements.

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POWERED BRANDS

UNAUDITED CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT

For the Three and Six Months Ended June 30, 2022


	Ordinary Shares						Additional				Total
	Class A			Class B			Paid-in		Accumulated		Shareholders’
	Shares	Amount		Shares	Amount		Capital		Deficit		Deficit
Balance - December 31, 2021	—	$	—	6,900,000	$	690	$	—	$	(17,576,510)	$	(17,575,820)
Net income	—		—	—		—		—		3,252,563		3,252,563
Balance - March 31, 2022 (unaudited)	—		—	6,900,000		690	$	—		(14,323,947)		(14,323,257)
Net income	—		—	—		—		—		3,877,543		3,877,543
Accretion of Class A ordinary shares subject to redemption	—		—	—		—		—		(301,443)		(301,443)
Balance - June 30, 2022 (unaudited)	—	$	—	6,900,000	$	690	$	—	$	(10,747,847)	$	(10,747,157)

For the Three and Six Months Ended June 30, 2021


	Ordinary Shares						Additional				Total
	Class A			Class B			Paid-in		Accumulated		Shareholders’
	Shares	Amount		Shares	Amount		Capital		Deficit		Deficit
Balance - December 31, 2020	—	$	—	6,900,000	$	690	$	24,310	$	(28,005)	$	(3,005)
Excess of cash received over fair value of private placement warrants	—		—	—		—		3,108,000		—		3,108,000
Accretion of Class A ordinary shares to redemption amount	—		—	—		—		(3,132,310)		(20,393,740)		(23,526,050)
Net income	—		—	—		—		—		1,318,311		1,318,311
Balance - March 31, 2021 (unaudited)	—		—	6,900,000		690		—		(19,103,434)		(19,102,744)
Net loss	—		—	—		—		—		(3,506,316)		(3,506,316)
Balance - June 30, 2021 (unaudited)	—	$	—	6,900,000	$	690	$	—	$	(22,609,750)	$	(22,609,060)

The accompanying notes are an integral part of these unaudited condensed financial statements.

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POWERED BRANDS

UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS


		For the Six Months Ended June 30,
	2022			2021

Cash Flows from Operating Activities:
Net income (loss)	$	7,130,106	$	(2,188,005)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Change in fair value of derivative warrant liabilities		(7,428,200)		1,242,400
Transaction costs associated with issuance of warrants		—		479,738
Income from investments held in Trust Account		(375,200)		(12,327)
Changes in operating assets and liabilities:
Prepaid expenses		110,179		(451,970)
Accounts payable		50,099		105,125
Accrued expenses		81,792		64,304
Due to related party		37,950		—
Net cash used in operating activities		(393,274)		(760,735)

Cash Flows from Investing Activities:
Cash deposited in Trust Account		—		(276,000,000)
Net cash used in investing activities		—		(276,000,000)

Cash Flows from Financing Activities:
Proceeds from promissory note issued to related party		—		25,000
Payment of promissory note issued to related party		—		(141,019)
Proceeds received from initial public offering, gross		—		276,000,000
Proceeds received from private placement		—		7,770,000
Offering costs paid		—		(5,655,234)
Net cash provided by financing activities		—		277,998,747

Net change in cash		(393,274)		1,238,012

Cash - beginning of the period		628,620		—
Cash - end of the period	$	235,346	$	1,238,012

Supplemental disclosure of noncash investing and financing activities:
Offering costs included in accounts payable	$	—	$	343,335
Offering costs included in accrued expenses	$	—	$	70,000
Offering costs paid by related party under promissory note	$	—	$	23,219
Deferred underwriting commissions in connection with the initial public offering	$	—	$	9,660,000

The accompanying notes are an integral part of these unaudited condensed financial statements.

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POWERED BRANDS

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

Powered Brands (the “Company”) is a blank check company incorporated as a Cayman Islands exempted company on September 18, 2020. The Company was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses that the Company has not yet identified (“Business Combination”).

As of June 30, 2022, the Company had not yet commenced operations. All activity for the period from September 18, 2020 (inception) through June 30, 2022, relates to the Company’s formation and the initial public offering (the “Initial Public Offering”), which is described below, and subsequent to the Initial Public Offering, a search for a potential Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on investments held in trust account from the proceeds derived from the Initial Public Offering and the sale of the Private Placement Warrants (as defined below).

The Company’s sponsor is PB Management, a Cayman Islands exempted company (“Sponsor”). The registration statement for the Company’s Initial Public Offering was declared effective on January 7, 2021. On January 12, 2021, the Company consummated its Initial Public Offering of 27,600,000 units (the “Units” and, with respect to the Class A ordinary shares included in the Units being offered, the “Public Shares”), including 3,600,000 additional Units to cover over-allotments (the “Over-Allotment Units”), at $10.00 per Unit, generating gross proceeds of $276.0 million, and incurring offering costs of approximately $15.8 million, of which approximately $9.7 million was for deferred underwriting commissions (Note 6).

Simultaneously with the closing of the Initial Public Offering, the Company consummated the private placement (“Private Placement”) of 5,180,000 warrants (each, a “Private Placement Warrant” and collectively, the “Private Placement Warrants”), at a price of $1.50 per Private Placement Warrant with the Sponsor, generating gross proceeds of approximately $7.8 million (Note 4).

Upon the closing of the Initial Public Offering and the Private Placement, $276.0 million ($10.00 per Unit) of the net proceeds of the Initial Public Offering and certain of the proceeds of the Private Placement were placed in a trust account (“Trust Account”) with Continental Stock Transfer & Trust Company acting as trustee and 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 of 1940, as amended, or the Investment Company Act, which invest only in direct U.S. government treasury obligations, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account as described below.

The Company’s management has broad discretion with respect to the specific application of the net proceeds of its Initial Public Offering and the sale of Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. The Company’s initial Business Combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the Trust Account (as defined below) (excluding the deferred underwriting commissions) at the time the Company signs a definitive agreement in connection with the initial Business Combination, and a majority of its independent directors must approve such initial business combination(s). However, the Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target business or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act.

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POWERED BRANDS

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

The Company will provide its holders of the Public Shares (the “Public Shareholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a general meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company. The Public Shareholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.00 per share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). The per-share amount to be distributed to Public Shareholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 6). These Public Shares have been recorded at a redemption value and classified as temporary equity upon the completion of the Initial Public Offering, in accordance with Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity” (“ASC 480”). In such case, the Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and a majority of the shares voted are voted in favor of the Business Combination. If a shareholder vote is not required by applicable law or stock exchange listing requirements and the Company does not decide to hold a shareholder vote for business or other reasons, the Company will, pursuant to its Amended and Restated Memorandum and Articles of Association (the “Amended and Restated Memorandum and Articles of Association”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (the “SEC”), and file tender offer documents with the SEC prior to completing a Business Combination. If, however, a shareholder approval of the transactions is required by applicable law or stock exchange listing requirements, or the Company decides to obtain shareholder approval for business or other reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. Additionally, each public shareholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction or whether they were a public shareholder on the record date for the general meeting held to approve the proposed transaction. If the Company seeks shareholder approval in connection with a Business Combination, the holders of the Founder Shares prior to this Initial Public Offering (the “Initial Shareholders”) agreed to vote their Founder Shares (as defined in Note 5) and any Public Shares purchased during or after the Initial Public Offering in favor of a Business Combination. In addition, the Initial Shareholders agreed to waive their redemption rights with respect to their Founder Shares and Public Shares in connection with the completion of a Business Combination. In addition, the Company agreed not to enter into a definitive agreement regarding an initial Business Combination without the prior consent of the Sponsor.

Notwithstanding the foregoing, the Company’s Amended and Restated Memorandum and Articles of Association provides that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Class A ordinary shares sold in the Initial Public Offering, without the prior consent of the Company.

The Company’s Sponsor, officers and directors agreed not to propose an amendment to the Company’s Amended and Restated Memorandum and Articles of Association (A) to modify the substance or timing of the Company’s obligation to allow the redemption of its Public Shares in connection with a Business Combination or to redeem 100% of its Public Shares if the Company does not complete a Business Combination within 24 months from the closing of the Initial Public Offering or (B) with respect to any other provisions relating to shareholders’ rights or pre-initial business combination activity, unless the Company provides the Public Shareholders with the opportunity to redeem their Class A ordinary shares in conjunction with any such amendment.

If the Company is unable to complete a Business Combination within 24 months, or January 12, 2023, (the “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 remaining shareholders and the board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii) the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.

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POWERED BRANDS

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

In connection with the redemption of 100% of the Company’s outstanding Public Shares for a portion of the funds held in the Trust Account, each holder will receive a full pro rata portion of the amount then in the Trust Account, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay the Company’s taxes payable (less taxes payable and up to $100,000 of interest to pay dissolution expenses).

The Initial Shareholders agreed to waive their liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Initial Shareholders should acquire Public Shares in or after the Initial Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if the Company fails to complete a Business Combination within the Combination Period. The underwriters agreed to waive their rights to their deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the funds held in the Trust Account that will be available to fund the redemption of the Company’s Public Shares. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution in the Trust Account will be less than the $10.00 per share initially held in the Trust Account. In order to protect the amounts held in the Trust Account, the Sponsor agreed that it will be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). In the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have vendors, service providers (except the Company’s independent registered public accounting firm), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account. There can be no guarantee that the Company will be successful in obtaining such waivers from its targeted vendors and service providers.

Liquidity and Going Concern

As of June 30, 2022, the Company had approximately $235,000 in its operating bank account and a working capital deficit of approximately $22,000.

The Company’s liquidity needs to date have been satisfied through a contribution of $25,000 from the Sponsor to cover for certain expenses in exchange for the issuance of the Founder Shares, a loan of approximately $141,000 from the Sponsor pursuant to the Note (as defined in Note 5), and the proceeds from the consummation of the Private Placement not held in the Trust Account. The Company repaid the Note in full on January 19, 2021.

In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, provide the Company Working Capital Loans (as defined in Note 5). On October 15, 2021, the Company entered into a promissory note with the Sponsor and may borrow up to $277,649 from the Sponsor for ongoing expenses reasonably related to the business of the Company and the consummation of the Business Combination (“Working Capital Promissory Note”). The full amount of the Working Capital Promissory Note was drawn on October 15, 2021, and immediately converted into warrants. See Note 5 for a description of the agreements. As of June 30, 2022 and December 31, 2021, there were no Working Capital Loans outstanding.

The Company’s management plans to continue its efforts to complete a Business Combination within 24 months of the closing of the Initial Public Offering, or January 12, 2023. The Company believes that the funds currently available to it outside of the Trust Account will be sufficient to allow it to operate until January 12, 2023; however, there can be no assurances that this estimate is accurate. The Company expects it would incur significant costs in pursuit of an initial Business Combination which would require additional liquidity.

SEC Form 10-Q filed by Powered Brands