References to the "company," Qell," "our," "us," or "we" refer to Qell
Acquisition Corp. 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
Annual Report on Form 10-K. 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
All statements other than statements of historical fact included in this Annual
Report on Form 10-K including, without limitation, statements under
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" regarding our financial position, business strategy and the plans
and objectives of management for future operations, are forward looking
statements. When used in this Annual Report on Form 10-K, words such as
"anticipate," "believe," "continue," "could," "estimate," "expect," "intends,"
"may," "might," "plan," "possible," "potential," "predict," "project," "should,"
"would" or the negative of such terms or other similar expressions, as they
relate to us or our management, identify forward looking statements. Factors
that might cause or contribute to such a discrepancy include, but are not
limited to, those described in our other SEC filings. Such forward looking
statements are based on the beliefs of management, as well as assumptions made
by, and information currently available to, our management. No assurance can be
given that results in any forward-looking statement will be achieved and actual
results could be affected by one or more factors, which could cause them to
differ materially. The cautionary statements made in this Annual Report on Form
10-K should be read as being applicable to all forward-looking statements
whenever they appear in this Annual Report. For these statements, we claim the
protection of the safe harbor for forward-looking statements contained in the
Private Securities Litigation Reform Act. Actual results could differ materially
from those contemplated by the forward-looking statements as a result of certain
factors detailed in our filings with the SEC. All subsequent written or oral
forward-looking statements attributable to us or persons acting on our behalf
are qualified in their entirety by this paragraph.
Overview
We are a blank check company incorporated as a Cayman Islands exempted company
on August 7, 2020. 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. We are an emerging
growth company and, as such, the Company is subject to all of the risks
associated with emerging growth companies.

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Our sponsor is Qell Partners LLC, a Cayman Islands limited liability company.
The registration statement for the Initial Public Offering was declared
effective on September 29, 2020. On October 2, 2020, we consummated our Initial
Public Offering of 37,950,000 units, including 4,950,000 additional units to
cover over-allotments, at $10.00 per unit, generating gross proceeds of
$379.5 million, and incurring offering costs of approximately $21.2 million,
inclusive of approximately $13.3 million in deferred underwriting commissions.
On September 30, 2020 and October 1, 2020, we consummated the private placement
of a total of 7,060,000 warrants at a price of $1.50 per private placement
warrant with the sponsor, generating gross proceeds of approximately
$10.6 million.
Upon the closing of the Initial Public Offering and the private placement,
$379.5 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 invest only in United States
government treasury obligations with a maturity of 185 days or less or in money
market funds meeting certain conditions under Rule 2a-7 under the Investment
Company Act which invest only in direct U.S. government treasury obligations,
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 October 2, 2022, 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 the
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.
Proposed Business Combination and Related Transaction
On March 30, 2021, we 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 Qell DutchCo B.V., a Netherlands limited
liability company and wholly owned subsidiary of our Sponsor ("Holdco"), Queen
Cayman Merger LLC, a Cayman Islands limited liability company ("Merger Sub"),
and Lilium GmbH, a German limited liability company ( "Lilium").The Business
Combination Agreement provides for, among other things, the following
transactions on closing (collectively, the "Business Combination"):
•
After signing of the Business Combination Agreement, and prior to closing of the
Business Combination, the legal form of our Sponsor shall be changed from a
private company with limited liability to a public limited liability company;

•

We will merge with and into Merger Sub (the "Merger"), with Merger Sub as the surviving company (the "Surviving Company") in the merger and, after giving effect to such merger, becoming a wholly owned subsidiary of our Sponsor;

•

In connection with the Merger, each issued and outstanding ordinary share of ours will be converted into a claim for a corresponding equity security in the Merger Sub, and such claim shall then be automatically contributed into our Sponsor in exchange for one ordinary share in the share capital of Holdco (a "Holdco Ordinary Share");




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•

Immediately following the Merger, Merger Sub and Holdco will cause Merger Sub to, commence winding up under the Cayman LLC Act and distribute all of its tangible and intangible assets (including all cash) and transfer any and all of its liabilities to Holdco (the "Liquidation Distribution and Assumption");

•

Immediately following the Liquidation Distribution and Assumption, Holdco will take a series of actions including, but not limited to, (i) consummation of the Private Placement (as defined below), (ii) appointment of Daniel Wiegand as executive director to the board of directors of Holdco, and (iii) execution of the Holdco Board Agreements (as defined in the Business Combination Agreement);

•

The shareholders of Lilium will exchange (the "Exchange") their interests in Lilium for Holdco Ordinary Shares. All Lilium shareholders, but for Daniel Wiegand, will receive Class A Holdco Ordinary Shares in the Exchange. Daniel Weigand will receive Class B Holdco Ordinary Shares. Class B Holdco Ordinary Shares will rank parri passu with Class A Holdco Ordinary Shares in all respects, provided they will be entitled to 3x super voting rights, subject to customary sunset provisions; and

•

Each outstanding warrant to purchase a Class A ordinary share of Qell will, by its terms, convert into a warrant to purchase one Holdco Ordinary Share, on the same contractual terms.



In accordance with the terms and subject to the conditions of the Business
Combination Agreement, the consideration to be received by the shareholders of
Lilium in connection with the transactions contemplated under the Business
Combination Agreement shall be an aggregate number of Holdco Ordinary Shares
equal to (a) $2,400,000,000, divided by (b) $10.00. Each our shareholder will
receive one Holdco Ordinary Share per our ordinary share, as set forth above.
Cash held in the trust account net of redemptions and the proceeds of the
Private Placement (as defined below), less the transaction costs of the Business
Combination, will be received by Holdco and used for general corporate purposes
after the Business Combination.
Concurrently with the execution of the Business Combination Agreement, we
entered into Subscription Agreements with certain investors (collectively, the
"Private Placement Investors") pursuant to which, among other things, such
investors agreed to subscribe for and purchase and Holdco agreed to issue and
sell to such investors, 45,000,000 Holdco Ordinary Shares (the "Private
Placement Shares"), for an aggregate of $450,000,000 (the "Private Placement")
in proceeds. The closing of the Private Placement is contingent upon, among
other things, the substantially concurrent consummation of the Business
Combination and related transactions.
Liquidity and Capital Resources
As of December 31, 2020, we had approximately $2.0 million in our operating bank
account and working capital of approximately $2.3 million.
To date, our liquidity needs have been satisfied through a payment of $25,000
from our Sponsor to cover certain of our expenses in exchange for the issuance
of the Founder Shares to our Sponsor, a loan of approximately $195,000 pursuant
to a promissory note issued to our Sponsor and the net proceeds from the
consummation of the Private Placement not held in the Trust Account. We fully
repaid the Note on November 2, 2020. 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 (the "Working Capital
Loans"). As of December 31, 2020, there were no amounts outstanding under the
Working Capital Loans.
Based on the foregoing, management believes that we will have sufficient working
capital and borrowing capacity from our Sponsor or an affiliate of our Sponsor,
or our officers and directors 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.

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Results of Operations
Our entire activity since inception through December 31, 2020 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 have neither engaged in any operations nor generated
any revenues to date. We will not generate any operating revenues until after
completion of our initial Business Combination. We will generate non-operating
income in the form of interest income on cash and cash equivalents. We expect to
incur increased 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 period from August 7, 2020 (inception) through December 31, 2020, we had
net loss of approximately $294,000 which consisted of approximately $343,000 in
general and administrative expenses and $30,000 of administrative fees to a
related party, which was partially offset by approximately $79,000 income earned
on investments held in Trust Account.
Contractual Obligations
We do not have any long-term debt obligations, capital lease obligations,
operating lease obligations, purchase obligations or long-term liabilities.
We entered into an Administrative Services Agreement pursuant to which we have
agreed to pay our Sponsor a total of $10,000 per month for office space,
utilities and administrative support.
On January 28, 2021, we entered into an Administrative Services Agreement with
Qell Operational Holdings LLC ("Holdings"), an affiliate of Qell Partners LLC
(the "Sponsor"), pursuant to which Holdings will provide certain administrative
services to us and we will reimburse Holdings up to $50,000 a month, subject to
adjustment in accordance with the terms of the agreement. In connection
therewith, we terminated the Administrative Services Agreement between the
Company and the Sponsor dated October 1, 2020.
The underwriters of the Initial Public Offering were entitled to underwriting
discounts and commissions of 5.5%, of which 2.0% (approximately $7.6 million)
was paid at the closing of the Initial Public Offering and 3.5% (approximately
$13.3 million) was deferred. The underwriters reimbursed us $300,000 for certain
of our offering costs. The deferred underwriting discounts and commissions will
become payable to the underwriters upon the consummation of the Initial Business
Combination and will be paid from the amounts held in the Trust Account. The
underwriters are not entitled to any interest accrued on the deferred
underwriting discounts and commissions.
Critical Accounting Policies
This management's discussion and analysis of our financial condition and results
of operations is based on our financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States of
America. The preparation of our 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 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 has identified the following as its
critical accounting policies:
Class A Ordinary Shares Subject to Possible Redemption
Class A ordinary shares subject to mandatory redemption (if any) are classified
as liability instruments and are measured at fair value. Conditionally
redeemable Class A ordinary shares (including Class A 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
the Company's control) are classified as temporary equity. At all other times,
Class A ordinary shares are classified as shareholders' equity. Our Class A
ordinary shares feature certain redemption rights that are considered to be
outside of our control

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and subject to the occurrence of uncertain future events. Accordingly, at
December 31, 2020, an aggregate of 36,362,236 Class A ordinary shares subject to
possible redemption are presented as temporary equity, outside of the
shareholders' equity section of the Company's balance sheet.
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 during the
periods. We have not considered the effect of the warrants sold in the Initial
Public Offering and the Private Placement to purchase an aggregate of 19,710,000
of our Class A ordinary shares in the calculation of diluted income (loss) per
share, since their inclusion would be anti-dilutive under the treasury stock
method.
Our statement of operations includes a presentation of income (loss) per share
for ordinary shares subject to redemption in a manner similar to the two-class
method of income per share. Net income per ordinary share, basic and diluted for
Class A ordinary shares is calculated by dividing the gain on marketable
securities, dividends, and interest held in the Trust Account, net of applicable
taxes available to be withdrawn from the Trust Account, resulting in net income
of $79,000 for the period from August 7, 2020 (inception) through December 31,
2020, by the weighted average number of Class A ordinary shares outstanding for
the period. Net loss per ordinary share, basic and diluted for Class B ordinary
shares is calculated by dividing the net loss, less income attributable to
Class A ordinary shares by the weighted average number of Class B ordinary
shares outstanding for the period.
Recent Accounting Pronouncements
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 financial statements.
Off-Balance Sheet Arrangements
As of December 31, 2020, we did not have any off-balance sheet arrangements as
defined in Item 303(a)(4)(ii) of Regulation S-K.
Inflation
We do not believe that inflation had a material impact on our business, revenues
or operating results during the period presented.
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 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

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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 7A.
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 8.
Financial Statements and Supplementary Data.

The information required by this Item is set forth in the financial statements and notes thereto beginning at page F-1 of this Annual Report on Form 10-K.



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                         Index To Financial Statements
                                                                                               Page
  Report of Independent Registered Public Accounting Firm                                        F-2
  Balance Sheet as of December 31, 2020                                                          F-3
  Statement of Operations for the year ended December 31, 2020                                   F-4
  Statement of Changes in Shareholders' Equity for the year ended December 31, 2020              F-5
  Statement of Cash Flows for the year ended December 31, 2020                                   F-6
  Notes to Financial Statements                                                                  F-7

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure



None.
Item 9a.
Controls and Procedures

Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are
designed to ensure that information required to be disclosed in our reports
filed or submitted under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the SEC's rules and forms.
Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed in
company reports filed or submitted under the Exchange Act is accumulated and
communicated to management, including our Chief Executive Officer (who serves as
our principal executive officer) and Chief Financial Officer (who serves as our
principal financial and accounting officer), to allow timely decisions regarding
required disclosure.
As of December 31, 2020, as required by Rules 13a-15 and 15d-15 under the
Exchange Act, our Chief Executive Officer and Chief Financial Officer carried
out an evaluation of the effectiveness of the design and operation of our
disclosure controls and procedures. Based upon their evaluation, our Chief
Executive Officer and Chief Financial Officer concluded that our disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Exchange Act) were effective.
Management's Report on Internal Controls Over Financial Reporting
This Annual Report on Form 10-K does not include a report of management's
assessment regarding internal control over financial reporting or an attestation
report of our independent registered public accounting firm due to a transition
period established by rules of the SEC for newly public companies.
Changes in Internal Control over Financial Reporting
During the most recently completed fiscal quarter, there has been no change in
our internal control over financial reporting that has materially affected, or
is reasonably likely to materially affect, our internal control over financial
reporting.
Item 9b.
Other Information

None.

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