References to the "Company," "Chain Bridge I," "our," "us" or "we" refer to
Chain Bridge I. The following discussion and analysis of the Company's financial
condition and results of operations should be read in conjunction with the
unaudited interim 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 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. 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 final prospectus for its Initial Public Offering 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 as a Cayman Islands exempted company
on January 21, 2021. We were 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 we have not yet identified
("Business Combination"). Although we are not limited to a particular industry
or geographic region for purposes of consummating a Business Combination, we
intend to focus on partnering with a technology company that will advance U.S.
national security and intelligence interests.
As of September 30, 2021, we had not yet commenced operations. All activity for
the period from January 21, 2021 (inception) through September 30, 2021 relates
to our formation and the initial public offering ("Initial Public Offering"),
which is described below. We will not generate any operating revenues until
after the completion of its initial Business Combination, at the earliest. We
will generate non-operating income in the form of interest income on cash and
cash equivalents from the proceeds derived from the Initial Public Offering. We
have selected December 31 as its fiscal year end.
Our sponsor is Chain Bridge Group, a Cayman Islands exempted limited liability
company (the "Sponsor"). The registration statement for our Initial Public
Offering was declared effective on November 9, 2021. On November 15, 2021, we
consummated its Initial Public Offering of 23,000,000 units (the "Units" and,
with respect to the Class A ordinary shares included in the Units being offered,
the "Public Shares"), including 3,000,000 additional Units to cover
over-allotments (the "Over-Allotment Units"), at $10.00 per Unit, generating
gross proceeds of $230.0 million, and incurring offering costs of approximately
$5.7 million, of which approximately $254,000 was for offering costs allocated
to derivative warrant liabilities.
Simultaneously with the closing of the Initial Public Offering, we consummated
the private placement ("Private Placement") of 10,550,000 warrants (each, a
"Private Placement Warrant" and collectively, the "Private Placement Warrants"),
at a price of $1.00 per Private Placement Warrant to the Sponsor and CB
Co-Investment LLC ("CB Co- Investment"), generating proceeds of approximately
$10.6 million (Note 4).
In addition, upon closing of the Initial Public Offering, CB Co-Investment
loaned us approximately $1.2 million at no interest (the "CB Co-Investment
Loan"). The CB Co-Investment Loan shall be repaid upon the closing of our
initial Business Combination or converted into Private Placement Warrants, at a
conversion price of $1.00 per warrant, at CB Co-Investment's discretion,
provided that any such conversion may not occur until after January 8, 2022.
Upon the closing of the Initial Public Offering, $234.6 million ($10.20 per
Unit) of net proceeds, including the net proceeds of the Initial Public
Offering, certain of the proceeds of the Private Placement and the proceeds from
the convertible promissory note issued to
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CB Co-Investment, was 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 of 1940, as amended, or 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 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.
Liquidity and Capital Resources
At September 30, 2021, we had cash of $4,000 and working capital deficit of
approximately $670,000.
Our liquidity needs up to September 30, 2021 had been satisfied through the cash
receipt of $25,000 from the Sponsor and CB Co-Investment to cover for certain
expenses on behalf of the Company in exchange for issuance of Founder Shares (as
defined in Note 4), and loan from the related party of approximately $222,000
under the Note (as defined in Note 4). The Company repaid the Note in full on
November 17, 2021. Subsequent to the consummation of the Initial Public
Offering, the Company's liquidity has been satisfied through the net proceeds
from the consummation of the Initial Public Offering, over-allotment, and the
Private Placement held outside of the Trust Account. 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 4). As of September 30, 2021, there were no amounts
outstanding under any Working Capital Loan.
Based on the foregoing, our management believes that we will have sufficient
working capital and borrowing capacity to meet our 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.
Our management continues to evaluate the impact of the COVID-19 pandemic and has
concluded that the specific impact is not readily determinable as of the date of
the financial statements. The unaudited condensed financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
Results of Operations
Our entire activity since inception up to September 30, 2021 was in preparation
for our Initial Public Offering. We will not generate any operating revenues
until the closing and completion of our initial Business Combination, at the
earliest.
For the three months ended September 30, 2021, we had a net loss of
approximately $37,000, which consisted of approximately $37,000 in general and
administrative expenses.
For the period from January 21, 2021 (inception) through September 30, 2021, we
had a net loss of approximately $69,000, which consisted of approximately
$69,000 in general and administrative expenses.
Contractual Obligations
Registration Rights and Shareholder Rights
The holders of Founder Shares, Private Placement Warrants and warrants that may
be issued upon conversion of Working Capital Loans (and any shares of ordinary
shares issuable upon the exercise of the Private Placement Warrants or warrants
issued upon conversion of the Working Capital Loans and upon conversion of the
Founder Shares), as well as the Forward Purchasers and their permitted
transferees, were entitled to registration rights pursuant to a registration and
shareholder rights agreement signed upon the consummation of the Initial Public
Offering. These holders will be entitled to certain demand and "piggyback"
registration rights. The Company will bear the expenses incurred in connection
with the filing of any such registration statements
Underwriting Agreement
The underwriters were entitled to an underwriting discount of $0.20 per unit, or
approximately $4.6 million in the aggregate, paid upon the closing of the
Initial Public Offering.
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Critical Accounting Policies
Deferred Offering Costs
The Company complies with the requirements of Financial Accounting Standards
Board (FASB) Accounting Standard Codification (ASC) 340-10-S99-1. Deferred
offering costs consist 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 total proceeds received. Offering costs allocated to
derivative warrant liabilities are expensed as incurred, presented as
non-operating expenses in the statement of operations. Offering costs associated
with the Initial Public Offering are charged to shareholders' equity upon the
completion of the Initial Public Offering.
Net Loss Per Share
We comply with accounting and disclosure requirements of FASB ASC Topic 260,
"Earnings Per Share." Net loss per share is computed by dividing net loss by the
weighted average number of shares of ordinary shares outstanding during the
period, excluding ordinary shares subject to forfeiture. Weighted average shares
at September 30, 2021 were reduced for the effect of an aggregate of 750,000
shares of Class B ordinary shares that are subject to forfeiture if the
over-allotment option is not exercised in full or in part by the underwriters.
At September 30, 2021, we did not have any dilutive securities and other
contracts that could, potentially, be exercised or converted into shares of
ordinary shares and then share in the earnings of our company. As a result,
diluted loss per share is the same as basic loss per share for the period
presented.
Recent Accounting Pronouncements
Management does not believe that any recently issued, but not yet effective,
accounting standards if currently adopted would have a material effect on the
accompanying interim financial statements.
Off-Balance Sheet Arrangements
As of September 30, 2021, we did not have any off-balance sheet arrangements as
defined in Item 303(a)(4)(ii) of Regulation S-K.
JOBS Act
The JOBS Act contains provisions that, among other things, relax certain
reporting requirements for qualifying public companies. We qualify as an
"emerging growth company" and under the JOBS Act are 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 a result, the
interim financial statements may not be comparable to companies that comply with
new or revised accounting pronouncements as of 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 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.
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CHAIN BRIDGE I 
