Log in
E-mail
Password
Show password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

QUEEN'S GAMBIT GROWTH CAPITAL

(GMBT)
SummaryQuotesChartsNewsCompanyFinancials 
SummaryMost relevantAll NewsOther languagesPress ReleasesOfficial PublicationsSector news

Queen Gambit Growth Capital : GAMBIT GROWTH CAPITAL Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)

08/16/2021 | 05:04pm EST

References to "we," "us," "our" or the "Company" are to Queen's Gambit Growth Capital, except where the context requires otherwise. 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 related notes thereto included in Item 1. Financial Statements located elsewhere in this Quarterly Report on Form 10-Q. Certain information contained in this Management's Discussion and Analysis of Financial Condition and Results of Operations set forth below includes forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors.

Forward-Looking Statements

Certain statements in 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. Our forward-looking statements include, but are not limited to, statements regarding our or our management team's expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," "plan," "possible," "potential," "predict," "project," "should," "would" and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. 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 Quarterly Report on Form 10-Q. 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 Cayman Islands exempted company and formed for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization with one or more businesses or entities (the "Business Combination"). The registration statement for our initial public offering was declared effective on January 19, 2021 (the "Initial Public Offering"). On January 22, 2021 (the "IPO Closing Date"), we consummated our Initial Public Offering of 34,500,000 units (the "Units"), including 4,500,000 Units that were issued pursuant to the underwriters' exercise of their over-allotment option in full. The Units were sold at a price of $10.00 per Unit, generating gross proceeds to us of $345,000,000.

Simultaneously with the consummation of the Initial Public Offering, our Company and Queen's Gambit Holdings LLC, a Delaware limited liability company (our "Sponsor") consummated the private placement (the "Private Placement") of 5,933,333 private placement warrants (the "Private Placement Warrants") at a purchase price of $1.50 per Private Placement Warrant (for a purchase price of approximately $8,900,000), generating gross proceeds to us of approximately $8,900,000.

Approximately $345,000,000 of the net proceeds from the Initial Public Offering and the Private Placement with our Sponsor has been deposited in a trust account established for the benefit of our public shareholders (the "Trust Account"). The net proceeds from the Initial Public Offering and the Private Placement of Private Placement Warrants held in the Trust Account have been invested solely in U.S. government securities having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940, as amended, which invest only in direct U.S. government treasury obligations.

                                       20

--------------------------------------------------------------------------------

We are currently in the process of evaluating suitable targets for an initial Business Combination. We intend to effectuate an initial Business Combination using cash from the proceeds of the Initial Public Offering, the Private Placement of our Private Placement Warrants, our shares, debt or a combination of our cash, shares and debt. We are pursuing acquisition opportunities and, at any given time, may be in various stages of due diligence or preliminary discussions with respect to a number of potential acquisitions. From time to time, we may enter into non-binding letters of intent, but we are currently not subject to any definitive agreement with respect to any initial Business Combination. However, we cannot assure you that we will identify any suitable target candidates or, if identified, that we will be able to complete the acquisition of such candidates on favorable terms or at all.

If we are unable to complete our Business Combination within 24 months 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 (net of any taxes payable by us 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 shareholders' rights as shareholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our 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.

Recent Developments

Proposed Business Combination

On July 28, 2021, the Company entered into a Business Combination Agreement ("Business Combination Agreement"), by and among the Company, Swvl Inc., a British Virgin Islands business company limited by shares incorporated under the laws of the British Virgin Islands ("Swvl"), Pivotal Holdings Corp, a British Virgin Islands business company limited by shares incorporated under the laws of the British Virgin Islands and wholly owned subsidiary of Swvl ("Holdings"), Pivotal Merger Sub Company I, a Cayman Islands exempted company with limited liability and wholly owned subsidiary of Holdings, and Pivotal Merger Sub Company II Limited, a British Virgin Islands business company limited by shares incorporated under the laws of the British Virgin Islands and wholly owned subsidiary of the Company ("BVI Merger Sub"). Subject to the satisfaction or waiver of the conditions to closing of the transactions contemplated by the Business Combination Agreement (the "Transactions"), as described in the Current Report on Form 8-K, filed with the SEC on July 28, 2021, the Transactions will effect an initial Business Combination between the Company and Swvl. The Business Combination Agreement and the Transactions contemplated thereby were unanimously approved by the boards of directors of each of the Company and Swvl.

Liquidity and Capital Resources

Until the consummation of the Initial Public Offering, our only source of liquidity was an initial sale of our Class B ordinary shares, par value $0.0001 per share ("Class B ordinary shares" or "Founder Shares"), to our Sponsor.

On the IPO Closing Date, we consummated our Initial Public Offering of 34,500,000 Units, including 4,500,000 Units that were issued pursuant to the underwriters' exercise of their over-allotment option in full. The Units were sold at a price of $10.00 per Unit, generating gross proceeds to us of approximately $345,000,000. On January 22, 2021, simultaneously with the consummation of our Initial Public Offering, we completed the private sale of 5,933,333 Private Placement Warrants at a purchase price of $1.50 per Private Placement Warrant to our Sponsor, generating gross proceeds to us of approximately $8,900,000. Approximately $345,000,000 of the net proceeds from the Initial Public Offering and the Private Placement with our Sponsor has been deposited in the Trust Account. The $345,000,000 of net proceeds held in the Trust Account includes approximately $10,000,000 of deferred underwriting discounts and commissions that will be released to the underwriters of the Initial Public Offering upon completion of our initial Business Combination. Of the gross proceeds from the Initial Public Offering and the Private Placement with our Sponsor that were not deposited in the Trust Account, $5,700,000 was used to pay underwriting discounts and commissions in the Initial Public Offering, $91,000 was used to repay advances from our Sponsor, and the balance was reserved to pay accrued offering and formation costs, business, legal and accounting due diligence expenses on prospective acquisitions and continuing general and administrative expenses.

                                       21

--------------------------------------------------------------------------------

As of June 30, 2021, we had approximately $1.5 million in our operating bank account and working capital of approximately $1.1 million.

Through June 30, 2021, our liquidity needs have been satisfied through a payment of $25,000 from our Sponsor to cover certain offering expenses on our behalf in exchange for the issuance of Founder Shares, a loan of approximately $91,000 in total prior to the Initial Public Offering from our Sponsor pursuant to an unsecured promissory note (the "Note"), and subsequent to the Initial Public Offering, and the net proceeds from the sale of the consummation of the Initial Public Offering and the Private Placement Warrants held outside of the Trust Account. We fully repaid the Note on January 28, 2021. In addition, in order to finance transaction costs in connection with an initial Business Combination, our Sponsor or an affiliate of our Sponsor, or our officers and directors may, but are not obligated to, provide us working capital loans (the "Working Capital Loans"). As of June 30, 2021, there were no amounts outstanding under any 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 an initial 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 initial Business Combination.

Results of Operations

We have neither engaged in any significant operations nor generated any operating revenue. Our entire activity since December 9, 2020 (inception) through the IPO Closing Date 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, at the earliest. We will generate non-operating income in the form of investment income on our investments held in the Trust Account. 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 expenses as we conduct due diligence on prospective Business Combination candidates.

For the three months ended June 30, 2021, we had a net loss of approximately $1.7 million which consisted of approximately $562,000 in change in fair value of derivative warrant liabilities, and approximately $1.2 million of general and administrative expenses, partly offset by approximately $9,000 in investment income on the Trust Account.

For the six months ended June 30, 2021, we had a net loss of approximately $12.7 million which consisted of approximately $6.1 million of loss on issuance of private placement warrants, approximately $4.7 million in change in fair value of derivative warrant liabilities, approximately $488,000 of financing costs - derivative warrant liabilities and approximately $1.6 million of general and administrative expenses, partly offset by approximately $75,000 in investment income on the Trust Account.

Contractual Obligations

Registration and Shareholder Rights

The holders of Founder Shares, Private Placement Warrants and securities that may be issued upon conversion of Working Capital Loans, if any, are entitled to registration rights pursuant to a registration rights agreement.

These holders were entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, these holders will have certain "piggy-back" registration rights with respect to registration statements filed subsequent to the completion of the initial Business Combination. We will bear the expenses incurred in connection with the filing of any such registration statements.

                                       22

--------------------------------------------------------------------------------

Underwriting Agreement

We granted the underwriters a 45-day option from the final prospectus relating to the Initial Public Offering to purchase up to 4,500,000 Over-Allotment Units, if any, at the Initial Public Offering price less the underwriting discounts and commissions. On January 22, 2021, the underwriters fully exercised their over-allotment option.

The underwriters did not receive any underwriting discounts or commissions on the Affiliated Units. With respect to the remaining Units offered in the Initial Public Offering, the underwriters were entitled to an underwriting discount of $0.20 per unit, or $5.7 million in the aggregate, paid upon the closing of the Initial Public Offering. In addition, $0.35 per unit, or approximately $10.0 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.

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 GAAP. The preparation of these 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. We have identified the following as our critical accounting policies:

Investments Held in the Trust Account

Our portfolio of investments 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 and generally have a readily determinable fair value, or a combination thereof. When our investments held in the Trust Account are comprised of U.S. government securities, the investments are classified as trading securities. When our investments held in the Trust Account are comprised of money market funds, the investments are recognized at fair value. Trading securities and investments in money market funds are presented on the balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these securities is included in income from investments held in the Trust Account in the accompanying unaudited condensed statements of operations. The estimated fair values of investments held in the Trust Account are determined using available market information.

Derivative Warrant Liabilities

We do not use derivative instruments to hedge our exposures to cash flow, market, or foreign currency risks. We evaluate all of our financial instruments, including issued warrants to purchase its Class A ordinary shares, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and FASB ASC Topic 815, "Derivatives and Hedging" ("ASC 815"). 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.

The Public Warrants and the Private Placement Warrants are recognized as derivative liabilities in accordance with ASC 815. Accordingly, we recognize the warrant instruments as liabilities at fair value and adjusts the carrying value of the instruments to fair value at each reporting period until they are exercised. The fair value of the Public Warrants issued in connection with the Initial Public Offering were initially measured at fair value using a Monte Carlo simulation model, and subsequently measured by their listed trading price. The fair value of the Private Placement Warrants was initially and subsequently estimated using a Modified Black-Scholes model. The determination of the fair value of the warrant liability may be subject to change as more current information becomes available and accordingly the actual results could differ significantly. 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.

                                       23

--------------------------------------------------------------------------------

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 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, at June 30, 2021 and December 31, 2020, 30,153,944 and 0 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

Our condensed statements of operations include a presentation of net income (loss) per share for Class A ordinary shares subject to possible redemption in a manner similar to the two-class method of net income (loss) per ordinary share. Net income (loss) per ordinary share, basic and diluted, for Class A ordinary shares is calculated by dividing the income from investments held in the Trust Account, less interest available to be withdrawn for the payment of taxes, by the weighted average number of Class A ordinary shares outstanding for the periods. 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 periods. Class B ordinary shares include the Founder Shares as these ordinary shares do not have any redemption features and do not participate in the income earned on the Trust Account.

The calculation of diluted net income (loss) per ordinary share does not consider the effect of the warrants issued in connection with the Initial Public Offering and Private Placement since the exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive as the exercise price of the warrants is in excess of the average ordinary share price for the period.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements as of June 30, 2021.

JOBS Act

On April 5, 2012, the Jumpstart Our Business Startups Act of 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 qualify as an "emerging growth company" under the JOBS Act and are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We elected 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, our unaudited condensed financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

As an "emerging growth company", we are not 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 Public Company Accounting Oversight Board (United States) 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 chief executive officer'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.

                                       24

--------------------------------------------------------------------------------

Recent Accounting Pronouncements

In August 2020, the FASB issued 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. ASU 2020-06 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. We elected the modified retrospective method for transition. Adoption of the ASU did not have a material impact on our financial position, results of operations or cash flows.

We do not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on our financial statements.

© Edgar Online, source Glimpses

All news about QUEEN'S GAMBIT GROWTH CAPITAL
01/19QUEEN'S GAMBIT GROWTH CAPITAL : Regulation FD Disclosure (form 8-K)
AQ
2021QUEEN'S GAMBIT GROWTH CAPITAL : Other Events (form 8-K)
AQ
2021Swvl Inc. and Queen's Gambit Growth Capital Appoint W. Steve Albrecht to Its Board of D..
CI
2021QUEEN'S GAMBIT GROWTH CAPITAL : Non-Reliance on Previous Financials, Audits or Interim Rev..
AQ
2021Ride Sharing Startup Swvl to Acquire Controlling Stake in Viapool, Expand Into Latin Am..
MT
2021QUEEN GAMBIT GROWTH CAPITAL : SUBSCRIPTION AGREEMENT - Form 8-K
PU
2021QUEEN'S GAMBIT GROWTH CAPITAL : Entry into a Material Definitive Agreement, Other Events, ..
AQ
2021QUEEN'S GAMBIT GROWTH CAPITAL Management's Discussion and Analysis of Financial Condit..
AQ
2021QUEEN GAMBIT GROWTH CAPITAL : Swvl Achieves Exceptional Q3 2021 Results and Increases Grow..
PR
2021QUEEN GAMBIT GROWTH CAPITAL : Swvl Achieves Exceptional Q3 2021 Results and Increases Grow..
PU
More news