References to the "Company," "our," "us" or "we" refer to Blue Whale Acquisition
Corporation I. The following discussion and analysis of the Company's financial
condition and results of operations should be read in conjunction with the
unaudited condensed financial statements and the notes thereto contained
elsewhere in this report. Certain information contained in the discussion and
analysis set forth below includes forward-looking statements that involve risks
and uncertainties.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form
10-Q
includes forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). We have based these
forward-looking statements on our current expectations and projections about
future events. These forward-looking statements are subject to known and unknown
risks, uncertainties and assumptions about us that may cause our actual results,
levels of activity, performance or achievements to be materially different from
any future results, levels of activity, performance or achievements expressed or
implied by such forward-looking statements. In some cases, you can identify
forward-looking statements by terminology such as "may," "should," "could,"
"would," "expect," "plan," "anticipate," "believe," "estimate," "continue," or
the negative of such terms or other similar expressions. Such statements
include, but are not limited to, possible business combinations and the
financing thereof, and related matters, as well as all other statements other
than statements of historical fact included in this Form
10-Q.
Factors that might cause or contribute to such a discrepancy include, but are
not limited to, those described in our other Securities and Exchange Commission
("SEC") filings.
Overview
Blue Whale Acquisition Corp I is a blank check company incorporated as a Cayman
Islands exempted company on March 10, 2021 (inception). 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"). The Company is an early stage and emerging growth company and, as
such, the Company is subject to all of the risks with early stage and emerging
growth companies.
As of June 30, 2021, the Company had not yet commenced operations. All activity
for the period from March 10, 2021 (inception) through June 30, 2021 related to
the Company's formation and the initial public offering (the "Initial Public
Offering"), which is described below. The Company will not generate any
operating revenues until after the completion of its initial Business
Combination, at the earliest. The Company expects to generate
non-operating
income in the form of interest income from the proceeds derived from the Initial
Public Offering (as defined below). The Company has selected December 31 as its
fiscal year end.
The Company's sponsor is Blue Whale Sponsor I LLC, (the "Sponsor"). The
registration statement for the Company's Initial Public Offering was declared
effective on August 3, 2021. On August 6, 2021, the Company consummated its
Initial Public Offering of 20,000,000 units (the "Units" and, with respect to
the Class A ordinary shares included in the Units being offered, the "Public
Shares"), at $10.00 per Unit, generating gross proceeds of $200.0 million, and
incurring offering costs of approximately $12.2 million, of which $7.0 million
was for deferred underwriting commissions. The Company granted the underwriter a
45-day
option to purchase up to an additional 3,000,000 Units at the Initial Public
Offering price to cover over-allotments. On August 6, 2021, the underwriters
partially exercised the over-allotment option to purchase an additional
2,940,811 Units generating gross proceeds of approximately $29.4 million (the
"Over-Allotment"). The underwriters forfeited the balance of the option. The
Company incurred additional offering costs of approximately $0.6 million in cash
underwriting fees, and forfeited the remainder of the option.

                                       18
--------------------------------------------------------------------------------
  Table of Contents
Simultaneously with the closing of the Initial Public Offering, the Company
consummated the private placement ("Private Placement") of 3,000,000 warrants
(each, a "Private Placement Warrant" and collectively, the "Private Placement
Warrants") at a price of $2.00 per Private Placement Warrant to the Sponsor,
generating proceeds of $6.0 million. On August 6, 2021, simultaneously with the
issuance and sale of the Over-Allotment Units, the Company consummated the sale
of an additional 294,081 Private Warrants at $2.00 per Private Placement Warrant
(the "Additional Private Placement Warrants"), generating additional gross
proceeds of approximately $588,162.
Upon the closing of the Initial Public Offering, the Over-Allotment and the
Private Placement, $229.4 million ($10.00 per Unit) of the net proceeds of the
sale of the Units in the Initial Public Offering and of the Private Placement
Warrants in 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 treasury bills with a maturity of
185 days or less or in money market funds investing solely in U.S. Treasuries
and meeting certain conditions under Rule
2a-7
under the Investment Company Act of 1940, as amended, or the Investment Company
Act, 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.
Our management has broad discretion with respect to the specific application of
the net proceeds of the 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.
If we are unable to complete a Business Combination within 24 months from the
closing of the Initial Public Offering, or August 6, 2023 (the "Combination
Period"), we 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 (which interest shall be net of taxes payable
and up to $100,000 of interest to pay dissolution expenses), divided by the
number of then issued and 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 each case to our obligations under Cayman Islands law to
provide for claims of creditors and other requirements of applicable law.
Results of Operations
Our entire activity from March 10, 2021 (inception) through June 30, 2021 was
related to organizational activities and those necessary to prepare for the
Initial Public Offering. Although we consummated the Initial Public Offering, we
will not be generating any operating revenues until the closing and completion
of our initial Business Combination.
For the three months ended June 30, 2021, we had net loss of approximately
$5,000, which consisted solely of formation expenses.
For the period from March 10, 2021 (inception) through June 30, 2021, we had net
loss of approximately $5,000, which consisted solely of formation expenses.
Liquidity and Capital Resources
As of June 30, 2021, we had no cash and a working capital deficit of
approximately $638,965.
Our liquidity needs through June 30, 2021 were satisfied through the payment of
$25,000 from our Sponsor to cover certain expenses in exchange for the issuance
of the Founder Shares, approximately $78,965 of accrued expenses were paid by
the Sponsor on behalf of the Company. In addition, in order to finance
transaction costs in connection with a Business Combination, our Sponsor may,
but is not obligated to, provide us Working Capital Loans. As of June 30, 2021,
there were no amounts outstanding under any Working Capital Loan. The Company
has since completed its Initial Public Offering at which time capital in excess
of the funds deposited in the Trust Account and/or used to fund offering
expenses was released to the Company for general working capital purposes.

                                       19
--------------------------------------------------------------------------------
  Table of Contents
Based on the foregoing, management believes that we will have sufficient working
capital and borrowing capacity to meet its needs through the earlier of the
consummation of a Business Combination or one year from this filing. Over this
time period, we will be using these funds for paying existing accounts payable,
identifying and evaluating prospective initial Business Combination candidates,
performing due diligence on prospective target businesses, paying for travel
expenditures, selecting the target business to merge with or acquire, and
structuring, negotiating and consummating the Business Combination.
Contractual Obligations
Administrative Support Agreement
Commencing on August 6, 2021, we agreed to pay our Sponsor a total of $10,000
per month for office space, utilities, secretarial and administrative support
services provided to members of our management team. Upon completion of the
initial Business Combination or our liquidation, we will cease paying these
monthly fees.
Registration Rights
The holders of Founder Shares, Private Placement Warrants, and securities that
may be issued upon conversion of Working Capital Loans, if any, are entitled to
registration rights pursuant to a registration rights agreement. These holders
will be entitled to make up to three demands, excluding short form demands, that
we register such securities. In addition, these holders will have certain
"piggy-back" registration rights with respect to registration statements filed
subsequent to the completion of the initial Business Combination. We will bear
the expenses incurred in connection with the filing of any such registration
statements.
Underwriting Agreement
The Company granted the underwriters a
45-day
option to purchase up to 3,000,000 additional Units to cover over-allotments at
the Initial Public Offering price, less the underwriting discounts and
commissions. On August 18, 2021, the underwriters partially exercised the
over-allotment option to purchase an additional 2,940,811 Units.
The underwriters were paid a cash underwriting discount of 2.00% of the gross
proceeds of the Initial Public Offering, or $4,588,162. In addition, the
underwriters are entitled to a deferred fee of three and half percent (3.50%) of
the gross proceeds of the Initial Public Offering, or $8,029,284. The deferred
fee will become payable to the underwriters from the amounts held in the Trust
Account solely in the event that the Company completes a Business Combination,
subject to the terms of the underwriting agreement.
Forward Purchase Agreement
The Company intends to enter into a forward purchase agreement that will provide
for the purchase by it of up to an aggregate of 5,000,000 units for an aggregate
purchase price of up to $50,000,000, or $10.00 per unit, in a private placement
to close substantially concurrently with the closing of our initial business
combination. The forward purchase investor will determine in its sole discretion
the specific number of forward purchase units it will purchase, if any, pursuant
to the forward purchase agreement. Each forward purchase unit will consist of
one Class A ordinary share and
one-fourth
of one redeemable warrant. The terms of the forward purchase units will
generally be identical to the terms of the units being issued in this offering,
except that the securities underlying the forward purchase units will be subject
to certain registration rights.
Risk and Uncertainties
Management continues to evaluate the impact of the
COVID-19
pandemic on the industry and has concluded that while it is reasonably possible
that the virus could have a negative effect on the Company's financial position,
results of its operations, and/or search for a target company, the specific
impact is not readily determinable as of the date of the unaudited condensed
financial statements. The unaudited condensed financial statements does not
include any adjustments that might result from the outcome of this uncertainty.

                                       20
--------------------------------------------------------------------------------
  Table of Contents
Critical Accounting Policies and Estimates
This management's discussion and analysis of our financial condition and results
of operations is based on our unaudited condensed financial statements, which
have been prepared in accordance with U.S. GAAP. The preparation of these
unaudited condensed financial statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues and
expenses and the disclosure of contingent assets and liabilities in our
unaudited condensed financial statements. On an ongoing basis, we evaluate our
estimates and judgments, including those related to fair value of financial
instruments and accrued expenses. We base our estimates on historical
experience, known trends and events and various other factors that we believe to
be reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions. We have identified the
following as our critical accounting policies:
Deferred offering costs associated with the Initial Public Offering
Deferred offering costs consists of legal, accounting, underwriting fees and
other costs incurred through the balance sheet date that were directly related
to the Initial Public Offering. Offering costs are allocated to the separable
financial instruments issued in the Initial Public Offering based on a relative
fair value basis, compared to the total proceeds received. Offering costs
associated with derivative warrant liabilities are expensed as incurred,
presented as
non-operating
expenses in the statement of operations. Offering costs associated with the
Class A ordinary shares issued are charged to shareholders' equity upon the
completion of the Initial Public Offering.
Net loss per ordinary share
The Company complies with the accounting and disclosure requirements of ASC
Topic 260, "Earnings Per Share." Net loss per ordinary share is computed by
dividing net loss by the weighted average number of ordinary shares outstanding
during the period. At June 30, 2021, the Company did not have any dilutive
securities and other contracts that could, potentially, be exercised or
converted into ordinary shares and then share in the earnings of the Company. As
a result, diluted loss per share is the same as basic loss per share for the
period presented.
Recent accounting standards
In August 2020, the Financial Accounting Standards Board issued ASU
2020-06,
Debt - Debt with Conversion and Other Options (Subtopic
470-20)
and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic
815-40)
("ASU
2020-06")
to simplify accounting for certain financial instruments. ASU
2020-06
eliminates the current models that require separation of beneficial conversion
and cash conversion features from convertible instruments and simplifies the
derivative scope exception guidance pertaining to equity classification of
contracts in an entity's own equity. The new standard also introduces additional
disclosures for convertible debt and freestanding instruments that are indexed
to and settled in an entity's own equity. ASU
2020-06
amends the diluted earnings per share guidance, including the requirement to use
the
if-converted
method for all convertible instruments. ASU
2020-06
is effective January 1, 2022 and should be applied on a full or modified
retrospective basis, with early adoption permitted beginning on January 1, 2021.
The Company is currently assessing the impact, if any, that ASU
2020-06
would have on its financial position, results of operations or cash flows.
Management does not believe that any recently issued, but not yet effective,
accounting pronouncements, if currently adopted, would have a material effect on
the Company's financial statements.
Off-Balance
Sheet Arrangements
As of June 30, 2021, we did not have any
off-balance
sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation
S-K
and did not have any commitments or contractual obligations.

                                       21
--------------------------------------------------------------------------------
  Table of Contents
JOBS Act
On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains
provisions that, among other things, relax certain reporting requirements for
qualifying public companies. We will qualify as an "emerging growth company" and
under the JOBS Act will be allowed to comply with new or revised accounting
pronouncements based on the effective date for private (not publicly traded)
companies. We are electing to delay the adoption of new or revised accounting
standards, and as a result, we may not comply with new or revised accounting
standards on the relevant dates on which adoption of such standards is required
for
non-emerging
growth companies. As such, our unaudited condensed financial statements may not
be comparable to companies that comply with public company effective dates.
Additionally, we are in the process of evaluating the benefits of relying on the
other reduced reporting requirements provided by the JOBS Act. Subject to
certain conditions set forth in the JOBS Act, if, as an "emerging growth
company," we choose to rely on such exemptions we may not be required to, among
other things, (i) provide an auditor's attestation report on our system of
internal controls over financial reporting pursuant to Section 404, (ii) provide
all of the compensation disclosure that may be required of
non-emerging
growth public companies under the Dodd-Frank Wall Street Reform and Consumer
Protection Act, (iii) comply with any requirement that may be adopted by the
PCAOB regarding mandatory audit firm rotation or a supplement to the auditor's
report providing additional information about the audit and the unaudited
condensed financial statements (auditor discussion and analysis) and
(iv) disclose certain executive compensation related items such as the
correlation between executive compensation and performance and comparisons of
the CEO's compensation to median employee compensation. These exemptions will
apply for a period of five years following the completion of our Initial Public
Offering or until we are no longer an "emerging growth company," whichever is
earlier.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are a smaller reporting company as defined by Rule
12b-2
of the Exchange Act and are not required to provide the information otherwise
required under this item.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including
our principal executive officer and principal financial officer, we conducted an
evaluation of the effectiveness of our disclosure controls and procedures as of
the end of the fiscal quarter ended June 30, 2021, as such term is defined in
Rules
13a-15(e)
and
15d-15(e)
under the Exchange Act. Based on this evaluation, our principal executive
officer and principal financial officer have concluded that, as of the
evaluation date, our disclosure controls and procedures were effective.
Disclosure controls and procedures are designed to ensure that information
required to be disclosed by us in our Exchange Act reports is recorded,
processed, summarized, and reported within the time periods specified in the
SEC's rules and forms, and that such information is accumulated and communicated
to our management, including our principal executive officer and principal
financial officer or persons performing similar functions, as appropriate to
allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting that
occurred during the fiscal quarter ended June 30, 2021 covered by this Quarterly
Report on Form
10-Q
that has materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.

                                       22

--------------------------------------------------------------------------------

Table of Contents

© Edgar Online, source Glimpses