References to the "Company," "our," "us" or "we" refer to European Biotech 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 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 to be
consistently below," 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

We are a blank check company incorporated on January 8, 2021 as a Cayman Islands exempted company formed for the purpose of effecting a Business Combination. We will not be limited to a particular industry or geographic region in our identification and acquisition of a target company.



On March 18, 2021, we consummated our Initial Public Offering of 12,000,000
Units, at $10.00 per Unit, generating gross proceeds of $120.0 million, and
incurring offering costs of approximately $7.1 million, of which $4.5 million
was for deferred underwriting commissions (see Note 3 to our condensed financial
statements). We granted the underwriter a
45-day
option to purchase up to an additional 1,800,000 Units at the Initial Public
Offering price to cover over-allotments, if any. On April 29, 2021, the
underwriters partially exercised the over-allotment option, and the closing of
the issuance and sale of the additional 754,784 Over-Allotment Units occurred on
May 3, 2021. The issuance by the Company of the Over-Allotment Units at a price
of $10.00 per unit resulted in total gross proceeds of approximately
$7.5 million.

Simultaneously with the closing of the Initial Public Offering, we consummated
the Private Placement of 440,000 units, at a price of $10.00 per Private
Placement Unit with the Sponsor, generating gross proceeds of $4.4 million (see
Note 4 to our condensed financial statements included in this Quarterly Report
on Form
10-K
for the year ended December 31, 2021). If the over-allotment option is exercised
in full, the Sponsor will purchase an additional 36,000 Private Placement Units.
Simultaneously with the issuance and sale of the Option Units, the Company
consummated the private placement with the Sponsor of 15,096 Additional Private
Placement Units, generating total proceeds of $150,960.

Upon the closing of the Initial Public Offering and the Private Placement, approximately $120.0 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, located in the United States with Continental Stock Transfer & Trust Company acting as trustee, and will be invested only 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 which invests only in direct U.S. government treasury obligations, as determined by us, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account as described below. In addition, the Sponsor and certain investors have advanced an aggregate amount of approximately $360,000 into the Trust Account to cover for the over-allotment option, if exercised. If the over-allotment option is not exercised, the excess funds will be returned to such related parties. Upon partial exercise of the over-allotment, on May 4, 2021, the Company returned excess cash of $209,040 to the related parties.


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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 Units, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that we will be able to complete a Business Combination successfully.

We must complete one or more initial Business Combinations having an aggregate fair market value of at least 80% of the net assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the Trust Account) at the time of the signing of the agreement to enter into the initial Business Combination. However, we 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 or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act.



If we are unable to complete a Business Combination within 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 earned on the funds held in the Trust Account
and not previously released to us to pay our income taxes, if any (less up to
$100,000 of interest to pay dissolution expenses) divided by the number of the
then-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 the
case of clauses (ii) and (iii), to our obligations under Cayman Islands law to
provide for claims of creditors and the requirements of other applicable law.
There will be no redemption rights or liquidating distributions with respect to
our warrants, which will expire worthless if we fail to consummate a Business
Combination within the Combination Period.

As of June 30, 2022, we held cash of approximately $308,000, current liabilities of approximately $437,000 and deferred underwriting commissions of approximately $4.5 million. Further, we expect to continue to incur significant costs in the pursuit of our initial business combination. We cannot assure you that our plans to complete an initial business combination will be successful.

RESULTS OF OPERATIONS

We have neither engaged in any operations (other than searching for a Business Combination after our Initial Public Offering) nor generated any revenues to date. Our entire activity since inception up to June 30, 2022 related to our formation, the preparation for the Initial Public Offering, and since the closing of the Initial Public Offering, the search for a prospective initial Business Combination. We will not be generating any operating revenues until the closing and completion of our initial Business Combination, at the earliest. We generate non-operating income in the form of income from investments held in the Trust Account, and change in fair value of warrant liability. 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 in our search for and completion of a Business Combination.

For the three months ended June 30, 2022, we had net income of approximately $201,000, which consisted of approximately $401,000 of non-operating gain from changes in fair value of derivative warrant liabilities and approximately $172,000 in income from investments held in the Trust Account, partially offset by approximately $372,000 of general and administrative expenses.



For the three months ended June 30, 2021, we had we had net income of
approximately $474,000 which consisted of approximately $680,000 of
non-operating
gain from changes in fair value of derivative warrant liabilities and
approximately $4,000 in income from investments held in the Trust Account,
partially offset by approximately $195,000 of general and administrative
expenses, and a
non-operating
expense of approximately $16,000 related to offering costs for derivative
warrant liabilities.

For the six months ended June 30, 2022, we had net income of approximately $1.7 million, which consisted of approximately $2.2 million of non-operating gain from changes in fair value of derivative warrant liabilities and approximately $185,000 in income from investments held in the Trust Account, partially offset by approximately $665,000 of general and administrative expenses.


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For the period from January 8, 2021 (inception) through June 30, 2021, we had we
had net income of approximately $728,000, which consisted of approximately
$1.3 million of
non-operating
gain from changes in fair value of derivative warrant liabilities and
approximately $4,000 in income from investments held in the Trust Account,
partially offset by approximately $305,000 of general and administrative
expenses, and a
non-operating
expense of approximately $315,000 related to offering costs for derivative
warrant liabilities.

Liquidity and Going Concern

As of June 30, 2022, we had approximately $308,000 in our operating bank account and working capital of approximately $47,000.

Our liquidity needs through the consummation of the Initial Public Offering were satisfied through a payment of $25,000 from the Sponsor to purchase Founders Shares, and the loan proceeds from the Sponsor of $300,000 under the Note (Note 4 to our condensed financial statements). We repaid the Note in full on March 22, 2021. Subsequent to the consummation of the Initial Public Offering, our liquidity needs have been satisfied through the net proceeds from the consummation of the Initial Public Offering 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 our officers and directors may, but are not obligated to, provide us Working Capital Loans (as defined in Note 4). As of June 30, 2022 and December 31, 2021, there were no amounts outstanding under Working Capital Loans.

Management does not believe the current cash on hand will be sufficient to cover obligations that come due within one year of release. Management has determined that the liquidity, the mandatory liquidation and subsequent dissolution that will be required if the Company does not complete a business combination before March 18, 2023 raises substantial doubt about the Company's ability to continue as a going concern. Although Management expects that it will be able to raise additional capital to support its planned activities and complete a business combination on or prior to March 18, 2023, it is uncertain whether it will be able to do so. No adjustments have been made to the carrying amounts of assets or liabilities should we be required to liquidate after March 18, 2023. The condensed financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.



We continue to evaluate the impact of the
COVID-19
pandemic and have concluded that the specific impact is not readily determinable
as of the date of the condensed balance sheets. The condensed financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.

Contractual Obligations

Administrative Services Agreement

Commencing on the date that the Company's securities were first listed on the Nasdaq through the earlier of consummation of the initial Business Combination and the Company's liquidation, the Company agreed to pay affiliates of the Sponsor a total of $20,000 per month for office space, administrative and support services.

Registration Rights

The holders of the Founder Shares, Private Placement Units, Class A ordinary shares underlying the Private Placement Units and any warrants that may be issued upon conversion of Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans) were entitled to registration rights pursuant to a registration and shareholder rights agreement signed upon the effective date of the Initial Public Offering. The holders of these securities were entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the holders have certain "piggy-back" registration rights with respect to registration statements filed subsequent to the completion of the initial Business Combination. However, the registration and shareholder rights agreement provide that we will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lockup period. We will bear the expenses incurred in connection with the filing of any such registration statements.


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Underwriting Agreement

The underwriters were entitled to an underwriting discount of $0.20 per Unit, or $2.4 million in the aggregate, paid upon the closing of the Initial Public Offering. In addition, $0.35 per unit, or $4.2 million in the aggregate will be payable to the underwriters for deferred underwriting commissions. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that we complete a Business Combination, subject to the terms of the underwriting agreement.

On May 3, 2021 the underwriters partially exercised their over-allotment option. As a result, the underwriters were entitled to an additional underwriting discount of approximately $151,000, which was paid upon closing of the over-allotment. In addition, $264,000 will be payable to the underwriters for deferred underwriting commissions.

Critical Accounting Policies


This management's discussion and analysis of our financial condition and results
of operations is based on our condensed financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of our condensed financial statements
requires us to make estimates and judgments that affect the reported amounts of
assets, liabilities, income and expenses and the disclosure of contingent assets
and liabilities in our 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. The Company determined that
there have been no material changes to the critical accounting policies
disclosed in our Annual Report on Form
10-K
for the period ended December 31, 2021, filed with the SEC on March 31, 2022.

Recent Accounting Standards

Our 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 condensed financial statements.

Off-Balance

Sheet Arrangements

As of June 30, 2022 and December 31, 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 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 condensed 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 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.


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