UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

(Amendment No.1)

(Mark One)

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

For the quarterly period ended

September 30, 2021

☐ 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)

, NY

292 Madison Avenue, 8^th 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 March 8, 2022, 3,516,615 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, 24,083,385 Class A ordinary shares, 6,900,000 Class B ordinary shares, par value $0.0001 per share, and 13,207,671 warrants were issued and outstanding.

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EXPLANATORY NOTE

References throughout this Amendment No. 1 to the Quarterly Report on Form 10-Q/A to “we,” “us,” the “Company” or “our company” are to Powered Brands unless the context otherwise indicates.

This Amendment No. 1 to the Quarterly Report on Form 10-Q/A (“Amendment No. 1”) amends the Quarterly Report on Form 10-Q of Powered Brands as of and for the period ended September 30, 2021, as filed with the Securities and Exchange Commission (“SEC”) on November 15, 2021 (the “Original Filing”).

The interim financial statements in the Original Filing included a section within Note 2, Revision of Previously Reported Financial Statements, (“Note 2”) that described a revision to the Company’s classification of its Class A ordinary shares subject to redemption issued as part of the units sold in the Company’s initial public offering (“IPO”) on January 12, 2021. As described in Note 2, upon its IPO, the Company classified a portion of the Class A ordinary shares as permanent equity to maintain net tangible assets greater than $5,000,000 on the basis that the Company will consummate its initial business combination only if the Company has net tangible assets of at least $5,000,001. Previously, the Company did not consider redeemable stock classified as temporary equity as part of net tangible assets. Effective with these financial statements, the Company revised this interpretation to include temporary equity in net tangible assets. As a result, the Company's management determined that the Class A Shares included certain provisions that require classification of the Class A Shares as temporary equity. As a result, management corrected the error by restating all Class A ordinary shares subject to redemption as temporary equity. This resulted in an adjustment to the initial carrying value of the Class A ordinary shares subject to possible redemption with the offset recorded to additional paid-in capital (to the extent available), accumulated deficit and Class A ordinary shares.

In connection with the change in presentation for the Class A ordinary shares subject to possible redemption, the Company revised its earnings per share calculation to allocate income and losses shared pro rata between the two classes of shares. This presentation differs from the previously presented method of earnings per share, which was similar to the two-class method.

The Company determined the changes were not qualitatively material to the Company’s previously issued financial statements and did not restate its financial statements. Instead, the Company revised its previously reported financial statements within Note 2 in the Original Filing. Although the qualitative factors that management assessed tended to support a conclusion that the misstatements were not material, these factors were not strong enough to overcome the significant quantitative errors in the financial statements. Management concluded that the misstatement was such of magnitude that it is probable that the judgment of a reasonable person relying upon the financial statements would have been influenced by the inclusion or correction of the foregoing items. As such, upon further consideration of the change, the Company determined the change in classification of the Class A ordinary shares and change to its presentation of earnings per share is material quantitatively and it should restate its previously issued financial statements.

Therefore, on March 2, 2022, the Company’s management and the audit committee of the Company’s board of directors (the “Audit Committee”) concluded that the Company’s previously reported revision to the (i) unaudited interim financial statements included in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021, filed with the SEC on June 3, 2021; (ii) unaudited interim financial statements included in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2021, filed with the SEC on August 13, 2021; and (iii) Note 2 to the unaudited interim financial statements for the quarterly period ended September 30, 2021 and Item 4 of Part I included in the Company’s Original Filing (collectively, the “Affected Periods”), should be restated to report all Public Shares (as defined herein) as temporary equity and should no longer be relied upon. As such, the Company has restated the financial statements of the Affected Periods in this Amendment No. 1 to the Quarterly Report on Form 10-Q/A.

The restatement does not have an impact on its cash position and cash held in the trust account established in connection with the IPO (the “Trust Account”).

After re-evaluation, the Company’s management has concluded that in light of the errors described above, a material weakness existed in the Company’s internal control over financial reporting during the Affected Periods and that the Company’s disclosure controls and procedures were not effective. The Company’s remediation plan with respect to such material weakness is described in more detail in the Item 4 – Controls and Procedures, contained herein.

We are filing this Amendment No. 1 to amend and restate the Original Filing with modification as necessary to reflect the restatements. The following items have been amended to reflect the restatements:

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Part I, Item 1. Condensed Financial Statements

Part I, Item 4. Controls and Procedures

Part II, Item 1A. Risk Factors

In addition, the Company’s Chief Executive Officer and Chief Financial Officer have provided new certifications dated as of the date of this filing in connection with this Amendment No. 1 (Exhibits 31.1, 31.2, 32.1 and 32.2).

Except as described above, no other information included in the Original Filing is being amended or updated by this Amendment No. 1 and, other than as described herein, this Amendment No. 1 does not purport to reflect any information or events subsequent to the Original Filing. We have not amended our previously filed Quarterly Reports on Form 10-Q for the periods affected by the restatement. This Amendment No. 1 continues to describe the conditions as of the date of the Original Filing and, except as expressly contained herein, we have not updated, modified or supplemented the disclosures contained in the Original Filing. Accordingly, this Amendment No. 1 should be read in conjunction with the Original Filing and with our filings with the SEC subsequent to the Original Filing.

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POWERED BRANDS

Quarterly Report on Form 10-Q/A

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		Page No.
PART I. FINANCIAL INFORMATION
Item 1.	Condensed Financial Statements	1
	Condensed Balance Sheets as of September 30, 2021 (unaudited) and December 31, 2020	1
	Unaudited Condensed Statements of Operations for the Three and Nine Months Ended September 30, 2021	2
	Unaudited Condensed Statements of Changes in Shareholders’ Deficit for the Three and Nine Months Ended September 30, 2021	3
	Unaudited Condensed Statement of Cash Flows for the Nine Months Ended September 30, 2021	4
	Notes to Unaudited Condensed Financial Statements (as restated)	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures (as restated)	26
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities	28
Item 3.	Defaults Upon Senior Securities	28
Item 4.	Mine Safety Disclosures	28
Item 5.	Other Information	28
Item 6.	Exhibits	29
SIGNATURES		30

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PART I - FINANCIAL INFORMATION

Item 1. Condensed Financial Statements.

POWERED BRANDS

CONDENSED BALANCE SHEETS


	September 30, 2021		December 31, 2020
	(unaudited)
Assets:
Current assets:
Cash	$	555,212	$	—
Due from related party		61,901		—
Prepaid expenses		383,736		—
Total current assets		1,000,849		—
Investments held in Trust Account		276,019,285		—
Deferred offering costs associated with the initial public offering		—		419,962
Total Assets	$	277,020,134	$	419,962

Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders' Deficit:
Current liabilities:
Accounts payable	$	161,359	$	23,450
Accrued expenses		107,003		333,517
Note payable - related party		—		66,000
Total current liabilities		268,362		422,967
Deferred underwriting commissions		9,660,000		—
Derivative warrant liabilities		9,203,200		—
Total Liabilities		19,131,562		422,967

Commitments and Contingencies

Class A ordinary shares subject to possible redemption, $0.0001 par value; 27,600,000 and 0 shares at $10.00 per share at redemption value as of September 30, 2021 and December 31, 2020, respectively		276,000,000		—

Shareholders' Deficit:
Preference shares, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding as of September 30, 2021 and December 31, 2020		—		—
Class A ordinary shares, $0.0001 par value; 350,000,000 shares authorized; no non-redeemable shares issued or outstanding as of September 30, 2021 and December 31, 2020		—		—
Class B ordinary shares, $0.0001 par value; 150,000,000 shares authorized; 6,900,000 shares issued and outstanding as of September 30, 2021 and December 31, 2020		690		690
Additional paid-in capital		—		24,310
Accumulated deficit		(18,112,118)		(28,005)
Total Shareholders’ Deficit		(18,111,428)		(3,005)
Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit	$	277,020,134	$	419,962

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 and Nine Months Ended September 30, 2021


	Three Months Ended		Nine Months Ended
	September 30, 2021		September 30, 2021
General and administrative expenses	$	259,516	$	737,710
General and administrative expenses - related party		139,010		139,010
Loss from operations		(398,526)		(876,720)

Other income (expense)
Change in fair value of derivative warrant liabilities		4,889,200		3,646,800
Transaction costs associated with issuance of warrants		—		(479,738)
Income from investments held in Trust Account		6,958		19,285
Total other income, net		4,896,158		3,186,347
Net income	$	4,497,632	$	2,309,627

Weighted average shares outstanding of Class A ordinary shares, basic and diluted		27,600,000		26,487,912
Basic and diluted net income per share, Class A ordinary shares	$	0.13	$	0.07

Weighted average shares outstanding of Class B ordinary shares, basic		6,900,000		6,863,736
Weighted average shares outstanding of Class B ordinary shares, diluted		6,900,000		6,900,000
Basic and diluted net income per share, Class B ordinary shares	$	0.13	$	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 Nine Months Ended September 30, 2021


	Ordinary Shares						Additional				Total
	Class A			Class B			Paid-in				Shareholders’
	Shares	Amount		Shares	Amount		Capital		Accumulated Deficit		Deficit
Balance - January 1, 2021	—	$	—	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 subject to redemption amount	—		—	—		—		(3,132,310)		(20,393,740)		(23,526,050)
Net income	—		—	—		—		—		1,318,311		1,318,311
Balance - March 31, 2021 (as restated)	—		—	6,900,000		690		—		(19,103,434)		(19,102,744)
Net loss	—		—	—		—		—		(3,506,316)		(3,506,316)
Balance – June 30, 2021 (as restated)	—		—	6,900,000		690		—		(22,609,750)		(22,609,060)
Net income	—		—	—		—		—		4,497,632		4,497,632
Balance – September 30, 2021 (unaudited)	—	$	—	6,900,000	$	690	$	—	$	(18,112,118)	$	(18,111,428)

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

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POWERED BRANDS

UNAUDITED CONDENSED STATEMENT OF CASH FLOWS

For the Nine Months Ended September 30, 2021


Cash Flows from Operating Activities:
Net income	$	2,309,627
Adjustments to reconcile net income to net cash used in operating activities:
Change in fair value of derivative warrant liabilities		(3,646,800)
Transaction costs associated with issuance of warrants		479,738
Income from investments held in Trust Account		(19,285)
Changes in operating assets and liabilities:
Due from related party		(61,901)
Prepaid expenses		(356,936)
Accounts payable		118,024
Accrued expenses		33,998
Net cash used in operating activities		(1,143,535)

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		(5,955,234)
Net cash provided by financing activities		277,698,747

Net change in cash		555,212

Cash - beginning of the period		—
Cash - end of the period	$	555,212

Supplemental disclosure of noncash investing and financing activities:
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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Power Brands

Notes to Unaudited Condensed Financial Statements (As Restated)

NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (AS RESTATED)

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 September 30, 2021, the Company had not yet commenced operations. All activity for the period from September 18, 2020 (inception) through September 30, 2021, 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 will be invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act 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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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 offe

SEC Form 10-Q/A filed by Powered Brands (Amendment)