References in this report (the "Quarterly Report") to "we," "us" or the
"Company" refer to Bridgetown 2 Holdings Limited. References to our "management"
or our "management team" refer to our officers and directors, and references to
the "Sponsor" refer to Bridgetown 2 LLC. The following discussion and analysis
of the Company's financial condition and results of operations should be read in
conjunction with the 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.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of 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 Form 10-Q
including, without limitation, statements in this "Management's Discussion and
Analysis of Financial Condition and Results of Operations" regarding the
completion of the Proposed Business Combination (as defined below), 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, including that the conditions of
the Proposed Business Combination are not satisfied. 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 the Company's Annual Report on Form 10-K filed with the U.S.
Securities and Exchange Commission (the "SEC"). 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 in the Cayman Islands on June 24, 2020
formed for the purpose of effecting a merger, share exchange, asset acquisition,
share purchase, reorganization or similar business combination with one or more
businesses (the "Business Combination"). We intend to effectuate our Business
Combination using cash derived from the proceeds of the Initial Public Offering
and the sale of the Private Placement Warrants, our shares, debt or a
combination of cash, shares 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 a Business
Combination will be successful.
Recent Developments
On July 23, 2021, the Company entered into a Business Combination Agreement (as
it may be amended, supplemented or otherwise modified from time to time, the
"Business Combination Agreement"), by and among PropertyGuru Group Limited, a
Cayman Islands exempted company limited by shares ("PubCo"), B2 PubCo
Amalgamation Sub Pte. Ltd., a Singapore private company limited by shares and a
direct wholly-owned subsidiary of PubCo ("Amalgamation Sub") and PropertyGuru
Pte. Ltd., a Singapore private company limited by shares ("PropertyGuru").
The Business Combination Agreement and the transactions contemplated thereby
were approved by the boards of directors of each of the Company and
PropertyGuru, save for PropertyGuru's approval of (i) the Amalgamation (as
defined below), which is subject to a prescribed approval process under
Singapore law, and (ii) the conversion of preference shares in the capital of
PropertyGuru, which is to occur upon completion of a separate transaction
entered into by PropertyGuru, but which in any event is agreed to occur prior to
closing under the Business Combination Agreement.
The Business Combination Agreement provides for, among other things, the
following transactions: (i) the Company will merge with and into PubCo (the
"Merger"), with PubCo being the surviving entity; and (ii) following the Merger,
Amalgamation Sub and PropertyGuru will amalgamate and continue as one company,
with PropertyGuru being the surviving entity and becoming a wholly-owned
subsidiary of PubCo (the "Amalgamation"). The Merger, the Amalgamation and the
other transactions contemplated by the Business Combination Agreement are
hereinafter referred to as the "Business Combination."
The Business Combination is expected to close in the fourth quarter of 2021 or
the first quarter of 2022, following the receipt of the required approval by the
Company's and PropertyGuru's shareholders and the fulfillment of other customary
closing conditions.
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In accordance with the terms and subject to the conditions of the Business
Combination Agreement, (i) each issued and outstanding PropertyGuru ordinary
share will automatically be cancelled and converted into such number of newly
issued PubCo ordinary shares as determined in accordance with the Business
Combination Agreement; (ii) each outstanding PropertyGuru restricted stock unit
award will be assumed by PubCo and converted into the right to receive
restricted stock units based on such number of newly issued PubCo ordinary
shares as determined in accordance with the Business Combination Agreement;
(iii) each outstanding PropertyGuru option will be assumed by PubCo and
converted into an option in respect of such number of newly issued PubCo
ordinary shares as determined in accordance with the Business Combination
Agreement; (iv) each Company Warrant (as defined in the Business Combination
Agreement) will be assumed by PubCo and converted into a PubCo warrant to
purchase such number of newly issued PubCo ordinary shares as determined in
accordance with the Business Combination Agreement and pursuant to the Company
Warrant Assumption Agreement (as defined in the Business Combination Agreement);
(v) each issued and outstanding share of Amalgamation Sub will automatically be
converted into one Surviving Company Ordinary Share (as defined in the Business
Combination Agreement) and accordingly, PubCo shall be the holder of all
Surviving Company Ordinary Shares; (vi) each issued and outstanding Class A
ordinary share and Class B ordinary share of the Company will be cancelled and
cease to exist in exchange for one PubCo ordinary share; and (vii) each issued
and outstanding 2 private placement warrant of the Company will be assumed by
PubCo and converted into a warrant to purchase one PubCo ordinary share.
Results of Operations
We have neither engaged in any operations nor generated any operating revenues
to date. Our only activities through September 30, 2021 were organizational
activities, those necessary to prepare for the Initial Public Offering,
described below, and identifying a target company for a Business Combination. We
do not expect to generate any operating revenues until after the completion of
our Business Combination. We generate non-operating income in the form of
interest income on marketable securities held in the Trust Account. 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.
For the three months ended September 30, 2021, we had a net income of
$5,567,512, which consists of the change in fair value of warrant liability of
$8,035,200 and interest earned on marketable securities held in the Trust
Account of $4,516, offset by formation and operational costs of $2,472,204.
For the nine months ended September 30, 2021, we had a net loss of $7,208,469,
which consists of formation and operational costs of $4,239,694 and change in
fair value of warrant liability of $2,980,800, offset by interest earned on
marketable securities held in the Trust Account of $12,025.
For the three months ended September 30, 2020, we had no net income nor loss.
For the period from June 24, 2020 (inception) to September 30, 2020, we had a
net loss of $10,000, which consists of formation and operational costs.
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Liquidity and Capital Resources
On January 28, 2021, we consummated the Initial Public Offering of 29,900,000
Public Shares which includes the full exercise by the underwriter of its
over-allotment option in the amount of 3,900,000 Public Shares, at $10.00 per
Public Shares, generating gross proceeds of $299,000,000 which is described in
Note 4. Simultaneously with the closing of the Initial Public Offering, we
consummated the sale of 12,960,000 Private Placement Warrants at a price of
$0.50 per Private Placement Warrant in a private placement to the Sponsor,
generating gross proceeds of $6,480,000, which is described in Note 5.
For the nine months ended September 30, 2021, cash used in operating activities
was $920,875. Net loss of $7,208,469 was affected by interest earned on
marketable securities held in the Trust Account of $12,025, the change in fair
value of warrant liability of $4,406,400 and the loss on initial issuance of
Private Placement Warrants of $7,387,200, and transaction costs incurred in
connection with IPO of $22,869. Changes in operating assets and liabilities
provided $3,295,950 of cash for operating activities.
For the period from June 24, 2020 (inception) to September 30, 2020, there were
no cash used in or provided by operating activities. Net loss of $10,000 was
affected by changes in operating liabilities provided $10,000 of cash for
operating activities.
As of September 30, 2021, we had marketable securities held in the Trust Account
of $299,012,025 (including $12,025 of interest income) consisting of U.S.
Treasury Bills with a maturity of 185 days or less. We may withdraw interest
from the Trust Account to pay taxes, if any. We intend to use substantially all
of the funds held in the Trust Account, including any amounts representing
interest earned on the Trust Account (less income taxes payable), to complete
our Business Combination. To the extent that our share capital or debt is used,
in whole or in part, as consideration to complete our Business Combination, the
remaining proceeds held in the Trust Account will be used as working capital to
finance the operations of the target business or businesses, make other
acquisitions and pursue our growth strategies.
We intend to use the funds held outside 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 a Business Combination.
In order to fund working capital deficiencies or finance transaction costs in
connection with a Business Combination, the Sponsor, or certain of our officers
and directors or their affiliates may, but are not obligated to, loan us funds
as may be required. If we complete a Business Combination, we would repay such
loaned amounts. In the event that a Business Combination does not close, we may
use a portion of the working capital held outside the Trust Account to repay
such loaned amounts but no proceeds from our Trust Account would be used for
such repayment. The Working Capital Loans would either be repaid upon
consummation of a Business Combination or, at the lender's discretion, up to
$1,500,000 of such Working Capital Loans may be convertible into warrants of the
post-Business Combination entity at a price of $0.50 per warrant. Such warrants
would be identical to the Private Placement Warrants. Except for the foregoing,
the terms of such Working Capital Loans, if any, have not been determined and no
written agreements exist with respect to such loans. As of September 30, 2021,
the Company had no outstanding borrowings under the Working Capital Loans.
We do not believe we will need to raise additional funds in order to meet the
expenditures required for operating our business. However, if our estimate of
the costs of identifying a target business, undertaking in-depth due diligence
and negotiating a Business Combination are less than the actual amount necessary
to do so, we may have insufficient funds available to operate our business prior
to our Business Combination. Moreover, we may need to obtain additional
financing either to complete our Business Combination or because we become
obligated to redeem a significant number of our Public Shares upon consummation
of our Business Combination, in which case we may issue additional securities or
incur debt in connection with such Business Combination.
Off-Balance Sheet Arrangements
We have no obligations, assets or liabilities, which would be considered
off-balance sheet arrangements as of September 30, 2021. We do not participate
in transactions that create relationships with unconsolidated entities or
financial partnerships, often referred to as variable interest entities, which
would have been established for the purpose of facilitating off-balance sheet
arrangements. We have not entered into any off-balance sheet financing
arrangements, established any special purpose entities, guaranteed any debt or
commitments of other entities, or purchased any non-financial assets.
Contractual obligations
We do not have any long-term debt, capital lease obligations, operating lease
obligations or long-term liabilities other than described below.
The underwriters are entitled to a deferred fee of $0.35 per share, or
$8,715,000 in the aggregate on 24,900,000 shares sold in the Initial Public
Offering, which excludes 5,000,000 of the 7,875,000 shares that were purchased
by an affiliate.
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Critical Accounting Policies
The preparation of condensed financial statements and related disclosures in
conformity with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, disclosure of contingent assets and
liabilities at the date of the financial statements, and income and expenses
during the periods reported. Actual results could materially differ from those
estimates. We have identified the following critical accounting policies:
Warrant Liability
We account for warrants as either equity-classified or liability-classified
instruments based on an assessment of the warrant's specific terms and
applicable authoritative guidance in Financial Accounting Standards Board
("FASB") Accounting Standards Codification ("ASC") 480, Distinguishing
Liabilities from Equity ("ASC 480") and ASC 815, Derivatives and Hedging ("ASC
815"). The assessment considers whether the warrants are freestanding financial
instruments pursuant to ASC 480, meet the definition of a liability pursuant to
ASC 480, and whether the warrants meet all of the requirements for equity
classification under ASC 815, including whether the warrants are indexed to our
own ordinary shares, among other conditions for equity classification. This
assessment, which requires the use of professional judgment, is conducted at the
time of warrant issuance and as of each subsequent quarterly period end date
while the warrants are outstanding.
For issued or modified warrants that meet all of the criteria for equity
classification, the warrants are required to be recorded as a component of
additional paid-in capital at the time of issuance. For issued or modified
warrants that do not meet all the criteria for equity classification, the
warrants are required to be recorded at their initial fair value on the date of
issuance, and each balance sheet date thereafter. Changes in the estimated fair
value of the warrants are recognized as a non-cash gain or loss on the
statements of operations.
Class A Ordinary Shares Subject to Possible Redemption
We account for our ordinary shares subject to possible conversion in accordance
with the guidance in ASC Topic 480 "Distinguishing Liabilities from Equity."
Ordinary shares subject to mandatory redemption are classified as a liability
instrument and measured at fair value. Conditionally redeemable ordinary shares
(including ordinary shares that feature redemption rights that are either within
the control of the holder or subject to redemption upon the occurrence of
uncertain events not solely within our control) are classified as temporary
equity. At all other times, ordinary shares are classified as shareholders'
equity. Our ordinary shares feature certain redemption rights that are
considered to be outside of our control and subject to occurrence of uncertain
future events. Accordingly, ordinary shares subject to possible redemption are
presented at redemption value as temporary equity, outside of the shareholders'
equity section of our condensed balance sheets.
Net Income (Loss) Per Ordinary Share
Net income (loss) per ordinary share is computed by dividing net income (loss)
by the weighted average number of ordinary shares outstanding for the period.
The Company applies the two-class method in calculating earnings per share.
Accretion associated with the redeemable shares of Class A ordinary shares are
excluded from earnings per share as the redemption value approximates fair
value.
Recent Accounting Standards
Management does not believe that any recently issued, but not yet effective,
accounting standards, if currently adopted, would have a material effect on our
condensed financial statements.
In August 2020, the Financial Accounting Standards Board ("FASB") issued
Accounting Standards Update ("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. We are currently assessing the impact, if any, that ASU 2020-06 would
have on its financial position, results of operations or cash flows.
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