References to the "Company," "our," "us" or "we" refer to Williams Rowland
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 (the
"Securities Act"), 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," 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
U.S. Securities and Exchange Commission ("SEC") filings.
Overview
We are a blank check company incorporated as a Delaware corporation on March 10,
2021. We were incorporated for the purpose of effecting a Business Combination.
As of September 30, 2021, we have not yet commenced operations. All activity for
the period from March 10, 2021 (inception) through September 30, 2021 relates to
our formation and the initial public offering (the "Initial Public Offering"),
which is described below. The Company 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 from the
proceeds derived from the Initial Public Offering. We have selected December 31
as its fiscal year end.
Our Sponsors are Williams Rowland Sponsor LLC, a Delaware limited liability
company and Wrac, Ltd, a Guernsey company. The registration statement for our
Initial Public Offering was declared effective on July 26, 2021. On July 29,
2021, we consummated the Initial Public Offering of 20,000,000 units (the
"Units" and, with respect to the shares of Common Stock included in the Units
being offered, the "Public Shares"), at $10.00 per Unit, generating gross
proceeds of $200 million. On August 5, 2021, the underwriter fully exercised its
option and purchased 3,000,000 additional Units, generating gross proceeds of
$30 million (the "Over-Allotment").
Simultaneously with the closing of the Initial Public Offering, we consummated
the Private Placement of 9,900,000 Private Placement Warrants, at a price of
$1.00 per Private Placement Warrant to the Sponsor, generating proceeds of
approximately $9.9 million. Concurrent with the consummation of the
Over-Allotment on August 5, 2021, the Sponsors purchased 1,200,000 additional
Private Placement Warrants, generating proceeds of $1,200,000 in the Second
Private Placement.
Transaction costs of the IPO and subsequent over-allotment exercise amounted to
$13,237,672, comprised of $4,600,000 of underwriting discount, $8,050,000 of
deferred underwriting discount, and $587,672 of other offering costs.
Upon the closing of the Initial Public Offering and the Private Placement on
July 29, 2021, and the Over-Allotment and Second Private Placement on August 5,
2021, approximately $234.6 million ($10.20 per Unit) of the net proceeds of the
Initial Public Offering and the Private Placement was placed in a 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 having a maturity of 185 days or less or in money
market funds meeting certain conditions under Rule 2a-7 promulgated under
Investment Company Act of 1940, as amended, (the "Investment Company Act"),
which invest 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.
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Our management has broad discretion with respect to the specific application of
the net proceeds of its 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 18 months from the
closing of the Initial Public Offering, or January 29, 2023 (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 (less taxes payable and
up to $100,000 of interest to pay dissolution expenses), divided by the number
of then outstanding Public Shares, which redemption will completely extinguish
Public Shareholder's rights as shareholders (including the right to receive
further liquidating 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), our obligation under Cayman Islands law to
provide for claims of creditors and in all cases subject to the other
requirements of applicable law.
Liquidity and Capital Resources
As of September 30, 2021, we had $488,491 in our operating bank account and
working capital of $738,988.
Our liquidity needs prior to the consummation of the Initial Public Offering
were satisfied through the cash contribution of $25,000 from the Sponsor to
purchase Founder Shares, and the Promissory Note from the Sponsor of up to
$600,000, under which $25,000 was outstanding as of September 30, 2021.
Subsequent to the consummation of the Initial Public Offering, our liquidity has
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 with Working
Capital Loans. To date, there were no amounts outstanding under any Working
Capital Loan.
Based on the foregoing, 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 the funds held outside of the Trust Account 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
Results of Operations
All of our activity from March 10, 2021 (inception) through September 30, 2021,
was in preparation for an Initial Public Offering, and since our Initial Public
Offering, our activity has been limited to the search for a prospective initial
Business Combination. We will not generate any operating revenues until the
closing and completion of our initial Business Combination.
For the three months ended September 30, 2021, we had a loss of approximately
$274,701, which consisted solely of general and administrative expenses of
$288,210 offset by trust income of $13,509.
For the period from March 10, 2021 (inception) through September 30, 2021, we
had a loss of approximately $275,372, which consisted solely of general and
administrative expenses of $288,881, offset by trust income of $13,509.
Contractual Obligations
Underwriting Agreement
The underwriter is entitled to $0.35 per unit, or approximately $7.0 million in
the aggregate, which will be payable to the underwriter for deferred
underwriting commissions. The deferred fee will become payable to the
underwriter from the amounts held in the Trust Account solely in the event that
that we complete a Business Combination, subject to the terms of the
underwriting agreement.
In connection with the consummation of the Over-Allotment on August 5, 2021, the
underwriter was paid an additional fee of $600,000 upon closing of the
Over-Allotment and approximately $1.05 million in deferred underwriting
commissions.
Administrative Support Agreement
We agreed to pay the Sponsor a total of $10,000 per month, commencing on the
date of listing on the NYSE, for office space, utilities, secretarial and
administrative support services provided to members of the management team. Upon
completion of the initial Business Combination or our liquidation, we will cease
paying these monthly fees.
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Critical Accounting Policies and Estimates
This management's discussion and analysis of our financial condition and results
of operations is based on our unaudited condensed financial statements, which
have been prepared in accordance with U.S. GAAP. The preparation of these
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. We
have identified the following as our critical accounting policies:
Deferred offering costs associated with the Initial Public Offering
Deferred offering costs consist of legal fees incurred through the balance sheet
date that are directly related to the Initial Public Offering. Upon completion
of the Initial Public Offering, offering costs will be 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
associated with the Common Stock will be charged to stockholder's equity upon
the completion of the Initial Public Offering.
Net Loss Per Share
The Company complies with the accounting and disclosure requirements of FASB ASC
Topic 260, "Earnings Per Share." The Company applies the two-class method in
calculating earnings per share. The contractual formula utilized to calculate
the redemption amount approximates fair value. The Class feature to redeem at
fair value means that there is effectively only one class of stock. Changes in
fair value are not considered a dividend of the purposes of the numerator in the
earnings per share calculation. Net income per share of common stock is computed
by dividing the pro rata net loss between the shares of redeemable common stock
and the shares of non-redeemable common stock by the weighted average number of
shares of common stock outstanding for each of the periods. The calculation of
diluted income per share does not consider the effect of the warrants issued in
connection with the IPO since the exercise of the warrants is contingent upon
the occurrence of future events and the inclusion of such warrants would be
anti-dilutive.
Recent Accounting Pronouncements
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. The Company is currently assessing the impact, , if any, that ASU
2020-06 would have on its financial position, results of operations or cash
flows.
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 and did not have any commitments
or contractual obligations.
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