References to the "Company," "EJF Acquisition Corp.," "EJFA," "our," "us" or
"we" refer to EJF Acquisition Corp. 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. Factors that might cause or contribute to such a discrepancy
include, but are not limited to, those described in our other SEC filings.
Overview
We are a blank check company incorporated on December 22, 2020 as a Cayman
Islands exempted company and incorporated 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").
Although we are not limited to a particular industry or sector for purposes of
consummating a Business Combination, we intend to focus our search on the
financial services sector. We are an emerging growth company and, as such, we
are subject to all of the risks associated with emerging growth companies.
We have neither engaged in any operations nor generated any revenues to date.
Our entire activity since inception has been to prepare for our initial Public
Offering, which was consummated on March 1, 2021 and, after the Initial Public
Offering, identifying a target company for a Business Combination.
Liquidity and Capital Resources
On March 1, 2021, we consummated the initial Public Offering of 28,750,000
units, which includes the exercise by the underwriters of their over-allotment
option in the amount of 3,750,000 units, at a price of $10.00 per unit,
generating aggregate gross proceeds of $287,500,000. Simultaneously with the
closing of the initial Public Offering, we consummated the sale of 5,166,667
Private Warrants to Wilson Boulevard LLC at a price of $1.50 per Private
Warrant, generating total proceeds of $7,750,000.
Following the initial Public Offering and the sale of the Private Warrants, a
total of $287,500,000 was placed in the Trust Account. We incurred $16,473,310
in offering costs, consisting of $5,750,000 of underwriting discount,
$10,062,500 of deferred underwriting discount, and $660,810 of other offering
costs.
At September 30, 2021, we had cash and marketable securities held in the Trust
Account of $287,574,207. We intend to use substantially all of the funds held in
the Trust Account, including any amounts representing interest earned on the
Trust Account (excluding deferred underwriting commissions and less taxes
payable) to complete our initial Business Combination. We may withdraw interest
from the Trust Account to pay our taxes. To the extent that our equity or debt
is used, in whole or in part, as consideration to complete our initial 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.
At September 30, 2021, we had cash of $443,414 held outside of the Trust
Account. We intend to use the funds held outside of 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.

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In order to fund working capital deficiencies or finance transaction costs in
connection with an initial Business Combination, our sponsor, officers,
directors, or their affiliates may, but are not obligated to, loan us funds as
may be required. If we complete our initial Business Combination, we would repay
such loaned amounts. In the event that the initial 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. Up to $1,500,000 of such loans may be
convertible into private placement warrants of the post Business Combination
entity at a price of $1.50 per warrant at the option of the lender. The warrants
would be identical to the private warrants.
Prior to the completion of the initial Business Combination, the Company does
not expect to seek loans from parties other than the Sponsor or an affiliate of
the Sponsor as the Company does not believe third parties will be willing to
loan such funds and provide a waiver against any and all rights to seek access
to funds in the Company's Trust Account. If we are unable to complete our
initial Business Combination because we do not have sufficient funds available
to us, we will be forced to cease operations and liquidate the Trust Account.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date.
Our only activities since inception through September 30, 2021 were
organizational activities, those necessary to prepare for the Initial Public
Offering, described below, and, subsequent to the Initial Public Offering,
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 after the
Initial Public Offering. We are incurring expenses as a result of being a public
company (for legal, financial reporting, accounting, and auditing compliance),
as well as for due diligence expenses in connection with completing a Business
Combination.
For the nine months ended September 30, 2021, we had net loss of approximately
$5,028,520, which consisted of $74,208 of interest earned on marketable
securities held in the Trust Account and operating account, offset by unrealized
loss on warrant liability of $1,502,636, offering costs allocated to warrant
liability of $862,470, excess of Private Placement Warrants fair value over
purchase price of $1,242,401, and operating costs of $1,495,252.
For the three months ended September 30, 2021, we had net loss of approximately
$13,581,011, which consisted of $28,794 of interest earned on marketable
securities held in the Trust Account and operating account, offset by unrealized
loss on warrant liability of $12,400,851 and operating costs of $1,208,966.
Critical Accounting Policies
The preparation of 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:
Ordinary Shares Subject to Possible Redemption
We account for our ordinary shares subject to possible redemption in accordance
with the guidance in Accounting Standards Codification ("ASC") Topic 480
"Distinguishing Liabilities from Equity." Ordinary shares subject to mandatory
redemption are classified as a liability instrument and are 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) is 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 as temporary equity, outside of the
shareholders' equity section of our unaudited condensed balance sheets.
The Company recognizes changes in redemption value immediately as they occur and
adjusts the carrying value of redeemable Class A ordinary shares to equal the
redemption value at the end of each reporting period. Increases or decreases in
the carrying amount of redeemable Class A ordinary shares are affected by
charges against additional paid in capital and accumulated deficit.
Offering Costs Associated with the Initial Public Offering
We complied with the requirements of the ASC
340-10-S99-1
and SEC Staff Accounting Bulletin ("SAB") Topic 5A-"Expenses of Offering".
Offering costs consist principally of professional and registration fees
incurred through the balance sheet date that are related to the IPO. We allocate
the offering costs between ordinary shares and Public Warrants using relative
fair value method, with the offering costs allocated to the Public Warrants
expensed immediately. Offering costs associated with the Class A ordinary shares
have been charged to shareholders' equity.

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Net Income Per Ordinary Share
We have two classes of shares, which are referred to as Class A ordinary shares
and Class B ordinary shares. Earnings and losses are shared pro rata between the
two classes of shares. The 14,750,000 potential common shares for outstanding
warrants to purchase the Company's stock were excluded from diluted earnings per
share for the three and nine months ended September 30, 2021 because the
warrants are contingently exercisable, and the contingencies have not yet been
met. As a result, diluted net income per common share is the same as basic net
income per common share for the periods.
Derivative Financial Instruments
The Company evaluates its financial instruments to determine if such instruments
are derivatives or contain features that qualify as embedded derivatives in
accordance with ASC Topic 815, "Derivatives and Hedging." For derivative
financial instruments that are accounted for as liabilities, the derivative
instrument is initially recorded at its fair value on the grant date and is then
re-valued
at each reporting date, with changes in the fair value reported in the
statements of operations. The classification of derivative instruments,
including whether such instruments should be recorded as liabilities or as
equity, is evaluated at the end of each reporting period.
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
unaudited condensed interim financial statements.
Off-Balance
Sheet Arrangements
As of September 30, 2021, we did not have any
off-balance
sheet arrangements.
Commitments and Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease
obligations or long-term liabilities as of September 30, 2021.
The underwriters are entitled to a deferred fee of $0.35 per Unit, or
$10,062,500, in aggregate. The underwriters' deferred commissions will be paid
to the underwriters from the funds held in the Trust Account upon and
concurrently with the completion of our initial business combination. The
deferred underwriting fees will be waived by the underwriters solely in the
event that we do not complete a business combination, subject to the terms of
the underwriting agreement.
JOBS Act
The Jumpstart Our Business Startups Act of 2012 (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 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 independent registered public accounting firm's
attestation report on our system of internal controls over financial reporting
pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, (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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