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11/19/2021 | 04:08pm EDT
References in this report (this "Quarterly Report") to "we," "us" or the
"Company" refer to -Phoenix Biotech Acquisition Corp. References to our
"management" or our "management team" refer to our officers and directors, and
references to the "Sponsor" refer to Phoenix Biotech Sponsor, LLC. 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 Quarterly Report. Certain information
contained in the discussion and analysis set forth below includes
forward-looking statements that involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act and Section 21E of the Exchange Act that
are not historical facts and involve risks and uncertainties that could cause
actual results to differ materially from those expected and projected. All
statements, other than statements of historical fact included in this Form
including, without limitation, statements in this "Management's Discussion and
Analysis of Financial Condition and Results of Operations" regarding the
Company's financial position, business strategy and the plans and objectives of
management for future operations, are forward-looking statements. Words such as
"expect," "believe," "anticipate," "intend," "estimate," "seek" and variations
and similar words and expressions are intended to identify such forward-looking
statements. Such forward-looking statements relate to future events or future
performance, but reflect management's current beliefs, based on information
currently available. A number of factors could cause actual events, performance
or results to differ materially from the events, performance and results
discussed in the forward-looking statements. For information identifying
important factors that could cause actual results to differ materially from
those anticipated in the forward-looking statements, please refer to the Risk
Factors section of the Company's final prospectus filed with the U.S. Securities
and Exchange Commission (the "SEC"). The Company's securities filings can be
accessed on the EDGAR section of the SEC's website at Except as
expressly required by applicable securities law, the Company disclaims any
intention or obligation to update or revise any forward-looking statements
whether as a result of new information, future events or otherwise.
Phoenix Biotech Acquisition Corp. was incorporated in Delaware on June 8, 2021.
The Company was formed for the purpose of entering into a merger, share
exchange, asset acquisition, stock purchase, reorganization or other similar
business transaction with one or more businesses that the Company has not yet
identified (a "Business Combination").
We expect to continue to incur significant costs in the pursuit of our
acquisition plans. We cannot assure you that our plans to complete a Business
Combination will be successful.
Results of Operations
As of September 30, 2021, the Company had not commenced any operations. All
activity through September 30, 2021 relates to the Company's formation and the
initial public offering (the "IPO"). The Company will not generate any operating
revenues until after the completion of a Business Combination, at the earliest.
The Company will generate
income in the form of interest income from the proceeds derived from the IPO
placed in the Trust Account (defined below).
For the three months ended September 30, 2021, and for the period June 8, 2021
(inception) through September 30, 2021, we had a net loss of $0 and $1,000
respectively which consisted of organizational costs.
Liquidity and Capital Resources
The registration statement for the Company's IPO was declared effective on
October 5, 2021. On October 8, 2021, the Company consummated the IPO of
15,500,000 units ("Units") (with respect to the Class A common stock included in
the Units being offered (the "Public Shares")) at $10.00 per Unit generating
gross proceeds of $155,000,000, which is discussed in Note 3. The company has
selected December 31 as its fiscal year end.

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Simultaneously with the closing of the IPO, the Company consummated the sale of
845,000 units ("Private Placement Units") at a price of $10.00 per Private
Placement Unit in a private placement to the Company's sponsor, Phoenix Biotech
Sponsor, LLC (the "Sponsor"), Cantor Fitzgerald & Co. (Cantor") and Cohen &
Company Capital Markets, a division of J.V.B. Financial Group, LLC ("CCM"),
generating gross proceeds of $8,450,000, which is described in Note 4.
Simultaneously with the closing of the IPO, the Company consummated the closing
of the sale of 2,000,000 additional Units upon receiving notice of the
underwriter's election to partially exercise its over-allotment option
("Over-allotment Units"), generating additional gross proceeds of $20,000,000
and incurring additional offering costs of $1,400,000 in underwriting fees, all
of which is deferred until the completion of the Company's initial Business
Combination. Simultaneously with the exercise of the over-allotment, the Company
consummated the Private Placement of an additional 40,000 Private Placement
Units to the Sponsor and CCM, generating gross proceeds of $400,000.
Following the closing of the IPO, $178,500,000 ($10.20 per Unit) from the net
proceeds of the sale of the Units in the IPO, the Over-allotment Units and the
Private Placement Units was placed in a trust account ("Trust Account") and will
be invested in U.S. government securities, within the meaning set forth in
Section 2(a)(16) of the Investment Company Act of 1940, as amended (the
"Investment Company Act"), with a maturity of 185 days or less or in money
market funds meeting the conditions of the Investment Company Act, as determined
by the Company, until the earlier of: (i) the completion of a Business
Combination and (ii) the distribution of the Trust Account, as described below.
For the period June 8, 2021 (inception) through September 30, 2021, there was
$1,000 of cash used in operating activities.
We intend to use substantially all of the funds held in the Trust Account,
including any amounts representing interest earned on the Trust Account (less
taxes payable), to complete our Business Combination. To the extent that our
capital stock or debt is used, in whole or in part, as consideration to complete
our 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.
As of September 30, 2021, we had no cash.
In order to finance transaction costs in connection with a Business Combination,
the Sponsor or an affiliate of the Sponsor, or certain of the Company's officers
and directors may, but are not obligated to, loan the Company funds as may be
required ("Working Capital Loans"). If the Company completes a Business
Combination, the Company may repay the Working Capital Loans out of the proceeds
of the Trust Account released to the Company. Otherwise, the Working Capital
Loans may be repaid only out of funds held outside the Trust Account. In the
event that a Business Combination does not close, the Company may use a portion
of proceeds held outside the Trust Account to repay the Working Capital Loans,
but no proceeds held in the Trust Account would be used to repay the Working
Capital Loans. Except for the foregoing, the terms of such Working Capital
Loans, if any, have not been determined and no written agreements exist with
respect to such loans. The Working Capital Loans would either be repaid upon
consummation of a Business Combination, without interest, or, at the lender's
discretion, up to $1,500,000 of such Working Capital Loans may be converted into
units of the post-Business Combination entity at a price of $10.00 per unit. The
units would be identical to the Private Placement Units. As of September 30,
2021, the Company had no outstanding borrowings under the Working Capital Loans.
We do not believe we will need to raise additional funds in order to meet the
expenditures required for operating our business. However, if our estimate of
the costs of identifying a target business, undertaking
due diligence and negotiating a Business Combination are less than the actual
amount necessary to do so, we may have insufficient funds available to operate
our business prior to our Business Combination. Moreover, we may need to obtain
additional financing either to complete our Business Combination or because we
become obligated to redeem a significant number of our Public Shares upon
consummation of our Business Combination, in which case we may issue additional
securities or incur debt in connection with such Business Combination.
Sheet Arrangements
We have no obligations, assets or liabilities, which would be considered
sheet arrangements as of September 30, 2021. We do not participate in
transactions that create relationships with entities or financial partnerships,
often referred to as variable interest entities, which would have been
established for the purpose of facilitating
sheet arrangements. We have not entered into any
sheet financing arrangements, established any special purpose entities,
guaranteed any debt or commitments of other entities, or purchased any

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Contractual obligations
We do not have any long-term debt, capital lease obligations, operating lease
obligations or long-term liabilities.
The underwriter is entitled to deferred underwriting commissions of $9,150,000
in the aggregate. The deferred fee will become payable to the underwriter from
the amounts held in the Trust Account solely in the event that the Company
completes a Business Combination, subject to the terms of the underwriting
On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains
provisions that, among other things, relax certain reporting requirements for
qualifying public companies. We will qualify as an "emerging growth company" and
under the JOBS Act will be 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
growth companies. As such, our financial statements may not be comparable to
companies that comply with 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 control over financial reporting pursuant to Section 404 of the
Sarbanes-Oxley Act, (ii) provide all of the compensation disclosure that may be
required of
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 executive compensation to median
employee compensation. These exemptions will apply for a period of five years
following the completion of our IPO or until we are no longer an "emerging
growth company," whichever is earlier.
Critical Accounting Policies
The preparation of unaudited condensed 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:
Common stock Subject to Possible Redemption
We account for our common stock subject to possible redemption in accordance
with the guidance in Accounting Standards Codification ("ASC") Topic 480
"Distinguishing Liabilities from Equity." Common stock subject to mandatory
redemption is classified as a liability instrument and is measured at fair
value. Conditionally redeemable common stock (including common stock that
features 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, common stock
are classified as stockholders' equity. Our common stock features certain
redemption rights that are considered to be outside of our control and subject
to occurrence of uncertain future events. Accordingly, common stock subject to
possible redemption is presented as temporary equity, outside of the
stockholders' equity section of our condensed balance sheets. The Company
recognizes changes in redemption value immediately as they occur and adjusts the
carrying value of redeemable common stock to equal the redemption value at the
end of each reporting period. Increases or decreases in the carrying amount of
redeemable common stock are affected by charges against additional paid in
capital and accumulated deficit.
Management does not believe that any other recently issued, but not yet
effective, accounting standards, if currently adopted, would have a material
effect on our condensed financial statements.



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