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OFFON

BURGUNDY TECHNOLOGY ACQUISITION CORPORATION

(BTAQ)
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Burgundy Technology Acquisition : Management's Discussion and Analysis of Financial Condition and Results of Operations.

06/09/2021 | 06:02am EST
References to the "Company," "our," "us" or "we" refer to Burgundy Technology
Acquisition Corporation. 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," 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 June 4, 2020 as a Cayman Islands
exempted company for the purpose of effecting a merger, share exchange, asset
acquisition, share purchase, reorganization or similar business combination with
one or more businesses or entities (the "Business Combination"), that we have
not yet identified.
Our sponsor is Burgundy Technology Sponsor Limited, a Jersey private limited
company (the "Sponsor"). The registration statement for our Initial Public
Offering was declared effective on August 26, 2020. On August 31, 2020, we
consummated its Initial Public Offering of 30,000,000 units (the "Units" and,
with respect to the Class A ordinary shares included in the Units, the "Public
Shares"), at $10.00 per Unit, generating gross proceeds of $300.0 million. The
underwriters exercised the over-allotment option in full and on September 18,
2020 purchased an additional 4,500,000 units (the "Over-Allotment Units"),
generating additional gross proceeds of $45.0 million (the "Over-Allotment"). We
incurred offering costs of approximately $19.6 million, including approximately
$12.1 million in deferred underwriting fees.
Simultaneously with the closing of the Initial Public Offering, we consummated
the private placement ("Private Placement") of 950,000 Units (the "Private
Placement Units") at a price of $10.00 per Private Placement Unit, generating
total gross proceeds of $9.5 million. We consummated a second closing (the
"Second Closing") of the Private Placement simultaneously with the closing of
the Over-Allotment on September 18, 2020 for an additional 112,500 Private
Placement Units to the Sponsor, generating gross proceeds to us of approximately
$1.1 million.
Upon the closing of the Initial Public Offering, the Over-Allotment and the
Private Placement, approximately $346.7 million ($10.05 per Unit) of the net
proceeds of the Initial Public Offering and certain of the proceeds of the
Private Placement was placed in a trust account ("Trust Account"), located in
the United States with Continental Stock Transfer & Trust Company acting as
trustee, and was invested only in U.S. government securities within the meaning
of Section 2(a)(16) of the Investment Company Act with a maturity of 185 days or
less or in money market funds investing solely in United States Treasuries and
meeting certain conditions under Rule 2a-7 under the Investment Company Act,
until the earlier of: (i) the completion of a Business Combination or (ii) the
distribution of funds held in 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 the Initial Public Offering, the Over-Allotment and the sale
of Private Placement Units, although substantially all of the net proceeds are
intended to be applied generally toward consummating our initial Business
Combination.
If we have not completed our initial Business Combination within 18 months
(unless such a period is extended as described herein), 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 (which interest shall
be net of taxes payable, and less 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 liquidation distributions,
if any), subject to applicable law, 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 each case 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 18 months
(unless such period is extended as described herein).
If we anticipate that we may not be able to consummate a Business Combination
within 18 months, we may extend the combination period. In order to extend the
time available for us to consummate a Business Combination, our Sponsor or its
affiliate or designees must deposit into the Trust Account approximately
$1.1 million ($0.033 per public share), on or prior to the date of the
applicable deadline, for each monthly extension, up to an aggregate of
approximately $6.8 million, or $0.198 per public share, if we effect extension
for up to six months in aggregate.
Going Concern
As of March 31, 2021, we had approximately $830,000 in our operating bank
account and working capital of approximately $815,000.
To date, our liquidity needs have been satisfied through a payment of $25,000
from our Sponsor to cover certain expenses on our behalf in exchange for the
issuance of the Founder Shares to our Sponsor, a loan of approximately $188,000
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
repaid the promissory note on September 3, 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 with Working Capital Loans. To date,
there were no amounts outstanding under any Working Capital Loan. We plan to
continue our efforts to complete a Business Combination within 18 months of the
closing of the Initial Public Offering, or February 28, 2022. We believe that
the funds currently available to it outside of the Trust Account will be
sufficient to allow it to operate until February 28, 2022; however, there can be
no assurances that its estimate is accurate.
In connection with our assessment of going concern considerations in accordance
with FASB ASC Topic 205-40, "Presentation of Financial Statements - Going
Concern," our management has determined that the mandatory liquidation date and
subsequent dissolution raises substantial doubt about our ability to continue as
a going concern. If we are unable to complete a Business Combination by
February 28, 2022, then we will cease all operations except for the purpose of
liquidating. No adjustments have been made to the carrying amounts of assets or
liabilities should we be required to liquidate after February 28, 2022.
Results of Operations
Our entire activity since inception up to March 31, 2021 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 generate any operating revenues until after
the completion of our initial Business Combination. We generate non-operating
income in the form of investment income from the Trust Account. We will continue
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.

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For the three months ended March 31, 2021, we had net income of approximately
$14.5 million, which consisted of approximately $5,000 in investment income from
the Trust Account and a gain of $14.7 million from changes in the fair value of
derivative warrant liabilities, partially offset by approximately $207,000 in
general and administrative expenses.
Contractual Obligations
We do not have any long-term debt obligations, capital lease obligations,
operating lease obligations, purchase obligations or long-term liabilities.
Critical Accounting Policies
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 accounting principles generally accepted
in the United States of America. The preparation of our unaudited condensed
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 unaudited 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 has identified the following as its
critical accounting policies:
Investments Held in the Trust Account
Our portfolio of investments held in the Trust Account is comprised of U.S.
government securities, within the meaning set forth in Section 2(a)(16) of the
Investment Company Act, with a maturity of 185 days or less, or investments in
money market funds that invest in U.S. government securities, or a combination
thereof. Our investments held in the Trust Account are classified as trading
securities. Trading securities are presented on the unaudited condensed balance
sheet at fair value at the end of each reporting period. Gains and losses
resulting from the change in fair value of these investments are included in
income from investments held in the Trust Account in the unaudited condensed
statement of operations. The estimated fair values of investments held in the
Trust Account are determined using available market information.
Class A Ordinary Shares Subject to Possible Redemption
We account for our Class A ordinary shares subject to possible redemption in
accordance with the guidance in FASB ASC Topic 480 "Distinguishing Liabilities
from Equity." 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 our 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 and subject to the occurrence of uncertain future
events. Accordingly, as of March 31, 2021 and December 31, 2020, 30,954,180 and
29,512,635 Class A ordinary shares subject to possible redemption are presented
as temporary equity, respectively, outside of the shareholders' equity section
of our condensed balance sheets.
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 period.
We have not considered the effect of the warrants sold in the Initial Public
Offering and Private Placement to purchase an aggregate of 17,781,250 shares 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.

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Our unaudited condensed statement of operations includes a presentation of
income (loss) per ordinary share for Class A ordinary shares subject to possible
redemption in a manner similar to the two-class method of income (loss) per
ordinary share. Net income (loss) per ordinary share, basic and diluted, for
Class A ordinary shares is calculated by dividing the gain on investments held
in the Trust Account, net of applicable taxes, if any, available to be withdrawn
from the Trust Account, resulting in net income of approximately $5,000 for the
three months ended March 31, 2021, by the weighted average number of Class A
ordinary shares subject to possible redemption outstanding for the period. Net
income (loss) per ordinary share, basic and diluted, for Class B ordinary shares
is calculated by dividing the net income (loss), adjusted for income
attributable to Class A ordinary shares, by the weighted average number of
Class B ordinary shares outstanding for the period.
Derivative Warrant Liabilities
We do not use derivative instruments to hedge exposures to cash flow, market or
foreign currency risks. We evaluate all of our financial instruments, including
issued stock purchase warrants, to determine if such instruments are derivatives
or contain features that qualify as embedded derivatives, pursuant to ASC 480
and ASC 815-15. The classification of derivative instruments, including whether
such instruments should be recorded as liabilities or as equity, is re-assessed
at the end of each reporting period.
We issued 17,250,000 warrants to purchase Class A ordinary shares to investors
related to our Initial Public Offering and issued 531,250 Private Placement
Warrants. All of our outstanding warrants are recognized as derivative
liabilities in accordance with ASC 815-40. Accordingly, we recognize the warrant
instruments as liabilities at fair value and adjust the instruments to fair
value at each reporting period. The liabilities are subject to re-measurement at
each balance sheet date until exercised, and any change in fair value is
recognized in our unaudited condensed statement of operations. Subsequent to
when the warrants began separately trading, the fair value measurements were
determined based on their trading price. The fair value of Private Placement
Warrants was calculated using the Black-Scholes Option Pricing Model since these
instruments do not have the early redemption feature. Derivative warrant
liabilities are classified as non-current liabilities as their liquidation is
not reasonably expected to require the use of current assets or require the
creation of current liabilities.
Recent Accounting Standards
In August 2020, the FASB issued Accounting Standards Update ("ASU") No. 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): Accounting for
Convertible Instruments and Contracts in an Entity's Own Equity ("ASU 2020-06"),
which simplifies accounting for convertible instruments by removing major
separation models required under current GAAP. The ASU also removes certain
settlement conditions that are required for equity-linked contracts to qualify
for the derivative scope exception, and it simplifies the diluted earnings per
share calculation in certain areas. We adopted ASU 2020-06 on January 1, 2021.
Adoption of the ASU did not impact our financial position, results of operations
or cash flows.
Our management does not believe that any other recently issued, but not yet
effective, accounting standards if currently adopted would have a material
effect on the accompanying unaudited condensed financial statements.
Off-Balance Sheet Arrangements
As of March 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

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revised accounting standards on the relevant dates on which adoption of such
standards is required for non-emerging growth companies. As a result, the
unaudited 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 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.
Item 3.
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. As of March 31, 2021, we were not subject to any market or interest rate
risk. The net proceeds of the Initial Public Offering, including amounts in the
Trust Account, will be invested in U.S. government securities with a maturity of
185 days or less or in money market funds that meet certain conditions under
Rule 2a-7 under the Investment Company Act of 1940, as amended, that invest only
in direct U.S. government treasury obligations. Due to the short-term nature of
these investments, we believe there will be no associated material exposure to
interest rate risk.
We have not engaged in any hedging activities since our inception and we do not
expect to engage in any hedging activities with respect to the market risk to
which we are exposed.
Item 4.
Controls and Procedures

Evaluation of Disclosure Controls and Procedures Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Quarterly Report, is recorded, processed, summarized, and reported within the time period specified in the SEC's rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including our chief executive officer and our chief financial officer, as appropriate to allow timely decisions regarding required disclosure. Our management evaluated, with the participation of our principal executive officer and principal financial and accounting officer (our "Certifying Officers"), the effectiveness of our disclosure controls and procedures as of March 31, 2021, pursuant to Rule 13a-15(b) under the Exchange Act. Based upon that evaluation, our Certifying Officers concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report, as the circumstances that led to the restatement of our financial statements described in this Quarterly Report on Form 10-Q had not yet been identified. Due solely to the events that led to our restatement of our financial statements, management has made changes in internal controls related to the accounting for warrants issued in connection with our initial public offering. In light of the material weakness that we identified, we performed additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with U.S. generally accepted accounting principles. Accordingly, management believes that the financial statements included in this Quarterly Report on Form 10-Q present fairly in all material respects our financial position, results of operations and cash flows for the period presented. We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only

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reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Changes in Internal Control over Financial Reporting There was no change in our internal control over financial reporting that occurred during the three months ended March 31, 2021, covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting as the circumstances that led to the restatement of our financial statements described in this Quarterly Report on Form 10-Q had not yet been identified. In light of the restatement of the financial statements included in this Quarterly Report on Form 10-Q, we plan to enhance our processes to identify and appropriately apply applicable accounting requirements to better evaluate and understand the nuances of the complex accounting standards that apply to our financial statements. Our plans at this time include providing enhanced access to accounting literature, research materials and documents and increased communication among our personnel and third-party professionals with whom we consult regarding complex accounting applications. The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects.

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