UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

CROWN PROPTECH ACQUISITIONS

(Exact name of registrant as specified in its charter)

Cayman Islands		001-40017		N/A
(State or other jurisdiction of incorporation or organization)		(Commission File Number)		(I.R.S. Employer Identification Number)


667 Madison Avenue, 12^th Floor
New York, NY		10065
(Address of principal executive offices)		(Zip Code)

+1 (212) 563-6400

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A ordinary shares, par value $0.0001 per share	CPTK	New York Stock Exchange
Redeemable warrants, each whole warrant exercisable for one Class A ordinary share at an exercise price of $11.50	CPTK WS	New York Stock Exchange
Units, each consisting of one Class A ordinary share and one-third of one redeemable warrant	CPTK U	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒ No ☐

As of August 22, 2022, 27,600,000 Class A ordinary shares, par value $0.0001, and 6,900,000 Class B ordinary shares, par value $0.0001, were issued and outstanding.

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CROWN PROPTECH ACQUISITIONS

Quarterly Report on Form 10-Q

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		Page No.
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements	1

	Consolidated Condensed Balance Sheets as of June 30, 2022 (unaudited) and December 31, 2021	1

	Unaudited Consolidated Condensed Statements of Operations for the three and six months ended June 30, 2022 and June 30, 2021	2

	Unaudited Consolidated Condensed Statements of Changes in Shareholders’ Deficit for the three and six months ended June 30, 2022 and June 30, 2021	3

	Unaudited Consolidated Condensed Statements of Cash Flows for the six months ended June 30, 2022 and June 30, 2021	4

	Notes to Unaudited Consolidated Condensed Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26

Item 4.	Controls and Procedures	27

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	28

Item 1A.	Risk Factors	28

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities	29

Item 3.	Defaults Upon Senior Securities	29

Item 4.	Mine Safety Disclosures	29

Item 5.	Other Information	29

Item 6.	Exhibits	30

SIGNATURES		31

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

CROWN PROPTECH ACQUISITIONS

CONSOLIDATED CONDENSED BALANCE SHEETS


	June 30,
	2022		December 31,
	(Unaudited)		2021
Assets
Current assets:
Cash	$	4,578	$	14,807
Prepaid expenses		223,658		75,898
Total current assets		228,236		90,705
Investments held in Trust account		276,427,886		276,013,345
Total assets	$	276,656,122	$	276,104,050

Liabilities, Class A ordinary shares subject to possible redemption and Shareholders’ Deficit
Current liabilities:
Accounts payable and accrued expenses	$	7,145,941	$	3,572,844
Due to related party		249,107		159,107
Convertible note		450,000		450,000
Total current liabilities		7,845,048		4,181,951
Warrant liabilities		1,421,333		8,101,600
Deferred underwriters’ discount		9,660,000		9,660,000
Total liabilities		18,926,381		21,943,551

Commitments
Class A ordinary shares subject to possible redemption, 27,600,000 shares at redemption value		276,427,886		276,013,345

Shareholders’ deficit:
Preference shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding		—		—
Class A ordinary shares, $0.0001 par value; 200,000,000 shares authorized; no shares issued or outstanding, excluding 27,600,000 shares subject to possible redemption		—		—
Class B ordinary shares, $0.0001 par value; 20,000,000 shares authorized; 6,900,000 shares issued and outstanding		690		690
Additional paid-in capital		—		—
Accumulated deficit		(18,698,835)		(21,853,536)
Total shareholders’ deficit		(18,698,145)		(21,852,846)
Total liabilities, redeemable shares and shareholders’ deficit	$	276,656,122	$	276,104,050

The accompanying notes are an integral part of these unaudited consolidated condensed financial statements.

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CROWN PROPTECH ACQUISITIONS

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 AND JUNE 30, 2021

(UNAUDITED)


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Formation loss and operating costs	$	2,311,262	$	481,236	$	3,525,566	$	607,545
Loss from operations		(2,311,262)		(481,236)		(3,525,566)		(607,545)

Other income (expense):
Trust dividend income		392,015		3,872		414,541		3,872
Change in fair value of warrant liabilities		2,132,000		(994,933)		6,680,267		9,522,933
Offering expenses related to warrant issuance		—		—		—		(780,268)
Total other income (expense)		2,524,015		(991,061)		7,094,808		8,746,537

Net income (loss)	$	212,753	$	(1,472,297)	$	3,569,242	$	8,138,992

Weighted average redeemable shares outstanding		27,600,000		27,600,000		27,600,000		27,600,000

Basic and diluted net income (loss) per redeemable share	$	0.01	$	(0.04)	$	0.10	$	0.29

Weighted average non-redeemable shares outstanding		6,900,000		6,900,000		6,900,000		6,900,000

Basic and diluted net income (loss) per common share	$	0.01	$	(0.04)	$	0.10	$	0.28

The accompanying notes are an integral part of these unaudited consolidated condensed financial statements.

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CROWN PROPTECH ACQUISITIONS

CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 AND JUNE 30, 2021

(UNAUDITED)


	Ordinary Shares			Additional				Total
	Class B			Paid-in		Accumulated		Shareholders’
	Shares	Amount		Capital		Deficit		Deficit
Balance as of December 31, 2021	6,900,000	$	690	$	—	$	(21,853,536)	$	(21,852,846)
Remeasurement of ordinary shares subject to redemption value	—		—		—		(22,526)		(22,526)
Net income	—		—		—		3,356,489		3,356,489
Balance as of March 31, 2022	6,900,000	$	690	$	—	$	(18,519,573)	$	(18,518,883)
Remeasurement of ordinary shares subject to redemption value	—		—		—		(392,015)		(392,015)
Net income	—		—		—		212,753		212,753
Balance as of June 30, 2022	6,900,000	$	690	$	—	$	(18,698,835)	$	(18,698,145)


	Ordinary Shares			Additional				Total
	Class B			Paid-in		Accumulated		Shareholders’
	Shares	Amount		Capital		Deficit		Deficit
Balance as of December 31, 2020	6,900,000	$	690	$	24,310	$	(5,894)	$	19,106
Excess fair value of Private Placement Warrants	—		—		50,134		—		50,134
Remeasurement of ordinary shares subject to redemption value	—		—		(74,444)		(28,563,378)		(28,637,822)
Net income	—		—		—		9,611,289		9,611,289
Balance as of March 31, 2021	6,900,000	$	690	$	—	$	(18,957,983)	$	(18,957,293)
Net loss	—		—		—		(1,472,297)		(1,472,297)
Balance as of June 30, 2021	6,900,000	$	690	$	—	$	(20,430,280)	$	(20,429,590)

The accompanying notes are an integral part of these unaudited consolidated condensed financial statements.

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CROWN PROPTECH ACQUISITIONS

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2022 AND JUNE 30, 2021

(UNAUDITED)


	For the six		For the six
	months ended		months ended
	June 30, 2022		June 30, 2021
Cash Flows from Operating Activities:
Net income	$	3,569,242	$	8,138,992
Adjustments to reconcile net income to net income cash used in operating activities:
Change in fair value of warrant liabilities		(6,680,267)		(9,522,933)
Trust dividend income		(414,541)		(3,872)
Offering costs allocated to warrants		—		780,268
Changes in current assets and current liabilities:
Prepaid expenses		(147,760)		(433,982)
Due to related party		90,000		24,107
Accounts payable and accrued expenses		3,573,097		(29,180)
Net cash used in operating activities		(10,229)		(1,046,600)

Cash Flows from Investing Activities:
Investment of cash into trust account		—		(276,000,000)
Net cash used in investing activities		—		(276,000,000)

Cash Flows from Financing Activities:
Proceeds from Initial Public Offering, net of underwriters’ discount		—		270,480,000
Proceeds from issuance of Private Placement Warrants		—		7,520,000
Repayment of promissory note to related party		—		(75,000)
Payments of offering costs		—		(328,534)
Net cash provided by financing activities		—		277,596,466

Net Change in Cash		(10,229)		549,866
Cash - Beginning of period		14,807		72,550
Cash - Ending of period	$	4,578	$	622,416

Supplemental Disclosure of Non-cash Financing Activities:
Initial value of Class A ordinary shares subject to possible redemption	$	—	$	276,000,000
Remeasurement of Class A ordinary shares subject to possible redemption	$	414,541	$	—
Initial value of warrant liabilities	$	—	$	21,177,866
Deferred underwriters’ discount payable charged to additional paid-in capital	$	—	$	9,660,000

The accompanying notes are an integral part of these unaudited consolidated condensed financial statements.

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CROWN PROPTECH ACQUISITIONS

NOTES TO FINANCIAL STATEMENTS

Note 1 — Organization and Business Operations

Organization and General

Crown Proptech Acquisitions (the “Company” or “Crown”) was incorporated in the Cayman Islands on September 24, 2020. The Company was formed for the purpose of entering into a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (a “business combination”). The Company is not limited to a particular industry or geographic region for purposes of consummating a business combination. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies. The Company has selected December 31 as its fiscal year end.

As of June 30, 2022, the Company had not yet commenced any operations. All activity through June 30, 2022, relates to the Company’s formation and the Initial Public Offering (“IPO”) described below, and since the closing of the IPO, the search for a prospective initial Business Combination. The Company will not generate any operating revenues until after the completion of its initial business combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the IPO.

Financing

The registration statement for the Company’s IPO was declared effective on February 9, 2021 (the “Effective Date”). On February 11, 2021, the Company consummated the IPO of 27,600,000 units (the “Units” and, with respect to the Class A ordinary shares included in the Units being offered, the “public share”), at $10.00 per Unit, generating gross proceeds of $276,000,000, which is discussed in Note 3.

Simultaneously with the closing of the IPO, the Company consummated the sale of 5,013,333 warrants (the “Private Placement Warrant”), at a price of $1.50 per Private Placement Warrant, which is discussed in Note 4.

Trust Account

Following the closing of the IPO on February 11, 2021, an amount of $276,000,000 from the net proceeds of the sale of the Units in the IPO and the sale of the Private Placement Warrants was placed in a trust account (“Trust Account”) which is invested in 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 in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company. Except with respect to interest earned on the funds held in the trust account that may be released to the Company to pay its tax obligations, the proceeds from the IPO and the sale of the private placement units will not be released from the trust account until the earliest of (a) the completion of the Company’s initial business combination, (b) the redemption of any public shares properly submitted in connection with a shareholder vote to amend the Company’s amended and restated certificate of incorporation, and (c) the redemption of the Company’s public shares if the Company is unable to complete the initial business combination within 24 months from the closing of the IPO, subject to applicable law. The proceeds deposited in the trust account could become subject to the claims of the Company’s creditors, if any, which could have priority over the claims of the Company’s public shareholders.

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Termination of the Proposed Brivo Transaction

On November 10, 2021, the Company entered into a business combination agreement (as it may be amended, supplemented or otherwise modified from time to time, the “BCA” or the “Business Combination Agreement”), by and among (i) the Company, (ii) Crown PropTech Merger Sub I Corp, a Delaware corporation and wholly owned direct subsidiary of Crown (“Merger Sub I”), (iii) Crown PropTech Merger Sub II LLC, a Delaware limited liability company and a wholly owned subsidiary of Crown (“Merger Sub II”, and together with Merger Sub I the “Merger Subs”) and (iv) Brivo, Inc., a Nevada corporation (“Brivo” and all the parties to the Business Combination Agreement, the “Parties to the Business Combination Agreement”) (the “Business Combination”). The obligation of Brivo to consummate the Business Combination was subject to certain closing conditions, including, but not limited to, the aggregate cash proceeds from Crown’s trust account, together with the proceeds from the sale of the PIPE Notes (as defined below), equaling no less than $75 million (after deducting any amounts paid to Crown shareholders that exercise their redemption rights in connection with the Business Combination) (the “BCA Minimum Cash Condition”).

On May 12, 2022 the Company and the other parties to the Business Combination Agreement entered into a First Amendment (the “First Amendment”) to the Business Combination Agreement. The First Amendment provides for an amendment to the definition of the “Outside Date” in the Business Combination Agreement and changes the date listed therein from July 10, 2022 to August 9, 2022 or such later date as may be mutually agreed by Crown and Brivo.

In connection with the signing of the Business Combination Agreement, the Company entered into subscription agreements (the “Subscription Agreements”) with certain investors (the “PIPE Investors”), pursuant to which the PIPE Investors agreed to subscribe for and, in connection with the consummation of the Business Combination, purchase convertible notes (the “PIPE Notes”), with an aggregate principal amount of $75 million, on the terms and subject to the conditions therein. Pursuant to the terms of the Subscription Agreements, each PIPE Investor had the right to terminate its Subscription Agreement after July 9, 2022, if the closing of the Business Combination had not occurred as of such date or at any date and time as the Business Combination Agreement is validly terminated. In addition, the obligation of the PIPE Investors to consummate the purchase of the PIPE Notes was subject to certain other closing conditions, including Crown having at closing at least $95 million of unrestricted cash and, to the extent a revolving credit facility existed at closing, the unrestricted cash together with the undrawn availability under that facility being at least $115 million (the “SA Minimum Cash Condition” and, together with the BCA Minimum Cash Condition, the “Minimum Cash Conditions”).

Golub Capital LLC and its affiliates (such entity, together with its affiliates, “Golub”), a PIPE Investor, subscribed for PIPE Notes with an aggregate principal amount of $68 million. On July 11, 2022, the Company received a notice of election from Golub, notifying the Company that Golub has elected to terminate Golub’s Subscription Agreement because the Business Combination was not consummated by July 9, 2022.

The Business Combination Agreement may be terminated under certain customary and limited circumstances prior to the closing of the Business Combination, including, but not limited to, subject to certain limited exceptions, by either Crown or Brivo if the Business Combination is not consummated by August 9, 2022. On August 10, 2022 the Company received a notice of election from Brivo, notifying the Company that Brivo has elected to terminate the Business Combination. As a result of such election the Business Combination was immediately terminated. In addition, the rest of the Subscription Agreements were automatically terminated. The Company believes that prior to termination Brivo breached the Business Combination Agreement, and that EMBUIA LLC, an affiliate of Dean M. Drako, the Chairman of the board of directors of Brivo, breached the Stockholder Support Agreement (as defined in the Business Combination Agreement), in each case, including breaching their respective obligations not to take certain actions in connection with a Company Acquisition Proposal (as defined in the Business Combination Agreement). The Company intends to vigorously pursue its remedies.

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The foregoing description of the Business Combination Agreement, the Subscription Agreements is subject to and qualified in its entirety by reference to the full text of the Business Combination Agreement and the Subscription Agreements, copies of which are included as Exhibits 2.1, 10.2, respectively, to the current report on Form 8-Ks filed with the SEC on November 16, 2021 and Exhibit 2.1 o the current report on Form 8-Ks filed with the SEC on May 13, 2022.

Initial Business Combination

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the IPO, although substantially all of the net proceeds are intended to be generally applied toward consummating a business combination.

The Company’s business combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the Trust Account (as defined below) (net of taxes payable) at the time of the signing an agreement to enter into a business combination. However, the Company will only complete a business combination if the post-business combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. There is no assurance that the Company will be able to successfully effect a business combination.

The Company will provide its public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of the initial business combination either (i) in connection with a stockholder meeting called to approve the initial business combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a proposed initial business combination or conduct a tender offer will be made by the Company, solely in its discretion. The stockholders will be entitled to redeem their shares for a pro rata portion of the amount then on deposit in the Trust Account (initially $10.00 per share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations).

The Class A ordinary shares subject to redemption is recorded at a redemption value and classified as temporary equity upon the completion of the IPO, in accordance with Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” In such case, the Company will proceed with a business combination if the Company has net tangible assets of at least $5,000,001 either immediately prior to or upon consummation of a business combination and, if the Company seeks stockholder approval, a majority of the issued and outstanding shares voted are voted in favor of the business combination.

The Company will have 24 months from the closing of the IPO (with the ability to extend with stockholder approval) to consummate a business combination (the “Combination Period”). However, if the Company is unable to complete a business combination within the Combination Period, the Company will redeem 100% of the outstanding public shares for a pro rata portion of the funds held in the Trust Account, 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 the Company, divided by the number of then outstanding public shares, subject to applicable law and as further described in the registration statement, and then seek to dissolve and liquidate.

The Company’s sponsor, officers and directors have agreed to (i) waive their redemption rights with respect to their Founder Shares, private placement shares and public shares in connection with the completion of the initial business combination, (ii) waive their redemption rights with respect to their Founder Shares and public shares in connection with a stockholder vote to approve an amendment to the Company’s amended and restated certificate of incorporation, and (iii) waive their rights to liquidating distributions from the trust account with respect to their Founder Shares and private placement shares if the Company fails to complete the initial business combination within the Combination Period.

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The Company’s sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has entered into a written letter of intent, confidentiality or similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under the Company’s indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act. However, the Company has not asked its sponsor to reserve for such indemnification obligations, nor has the Company independently verified whether its sponsor has sufficient funds to satisfy its indemnity obligations and believe that the Company’s sponsor’s only assets are securities of the Company. Therefore, the Company cannot assure that its sponsor would be able to satisfy those obligations.

Liquidity, Capital Resources and Going Concern

As of June 30, 2022, the Company had cash outside the Trust Account of $4,578 available for working capital needs and working capital deficit of $7,616,812. All remaining cash held in the Trust Account is generally unavailable for the Company’s use, prior to an initial business combination, and is restricted for use either in a Business Combination or to redeem Class A ordinary shares. As of June 30, 2022, none of the amount in the Trust Account was available to be withdrawn as described above.

Through June 30, 2022, the Company’s liquidity needs were satisfied through receipt of $25,000 from the sale of the Founder Shares, the remaining net proceeds from the initial public offering, the sale of Private Placement Warrants, the Promissory Note and the Convertible Note.

The Company has incurred and expects to continue to incur significant costs in pursuit of it financing and acquisition plans. The Company lacks the financial resources it needs to sustain operations for a reasonable period of time, which is considered to be one year from the issuance date of the financial statements. Although no formal agreement exists, the Sponsor is committed to extend loans as needed (see Note 5). Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not limited to, curtailing operations, suspending the pursuit of a potential merger target, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to in on commercially acceptable terms, if at all, or that its plans to consummate an initial Business Combination will be successful.

In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the above liquidity issues and the mandatory liquidation and subsequent dissolution, should the Company be unable to complete a Business Combination, raises substantial doubt about the Company’s ability to continue as a going concern. The Company has until February 2023 to consummate a Business Combination. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of time within one year after the date that the condensed financial statements are issued. If a Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after February 2023.

Risks and Uncertainties

In February 2022, the Russian Federation and Belarus commenced a military action with the country of Ukraine. As a result of this action, various nations, including the United States, have instituted economic sanctions against the Russian Federation and Belarus. As of the date of these financial statements, the impact of this action and the related sanctions on the world economy and the effect on these unaudited financial statements are currently not determinable.

Management continues to evaluate the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and search for a target company, the specific impact is not readily determinable as of the date of the unaudited condensed financial statements. The unaudited condensed financial statements do not include any adjustments that might result from the outcome of these uncertainties.

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The Company’s results of operations and ability to complete an initial business combination may be adversely affected by various factors that could cause economic uncertainty and volatility in the financial markets, many of which are beyond the Company’s control. The Company’s business could be impacted by, among other things, downturns in the financial markets or in economic conditions, increases in oil prices, inflation, increases in interest rates, supply chain disruptions, declines in consumer confidence and spending, the ongoing effects of the COVID-19 pandemic, including resurgences and the emergence of new variants, and geopolitical instability, such as the military conflict in the Ukraine. The Company cannot at this time fully predict the likelihood of one or more of the above events, their duration or magnitude or the extent to which they may negatively impact its business and the Company’s ability to complete an initial business combination.

Note 2 — Significant Accounting Policies

Basis of Presentation

The accompanying unaudited consolidated condensed financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for financial information and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP. In the opinion of management, the unaudited consolidated condensed financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results for the periods presented. Operating results for the three and six months ended June 30, 2022 is not necessarily indicative of the results that may be expected through December 31, 2022.

The Company’s subsidiaries include Crown PropTech Merger Sub I Corp., a Delaware corporation and wholly owned direct subsidiary of Crown (“Merger Sub I”) and Crown PropTech Merger Sub II LLC, a Delaware limited liability company and wholly owned direct subsidiary of Crown (“Merger Sub II”); both of which were formed for the purposes of facilitating a proposed business agreement. All intercompany transactions have been eliminated upon consolidation.

The accompanying unaudited consolidated condensed financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Form 10-K filed by the Company with the SEC on April 12, 2022.

Emerging Growth Company Status

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, (the “Securities Act”), as modified by the Jumpstart our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Use of Estimates

The preparation of these unaudited condensed financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at

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the date of the unaudited condensed financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.

Investments Held in Trust Account

At June 30, 2022 and December 31, 2021, the Trust Account had $276,427,886 and $276,013,345 held in marketable securities, respectively. During the three and six months ended June 30, 2022 and the three and six months end June 30, 2021, the Company did not withdraw any interest income from the Trust Account to pay its tax obligations.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000.At June 30, 2022 and December 31, 2021, the Company has not experienced losses on this account.

Class A Ordinary Shares Subject to Possible Redemption

The Company accounts for its 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 a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including 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, ordinary shares are classified as shareholders’ equity. The Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, as of June 30, 2022 and December 31, 2021, 27,600,000 shares of Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheet.

As of December 31, 2021 and June 30, 2022, the ordinary shares subject to possible redemption reflected on the condensed balance sheet are reconciled in the following table:


Gross proceeds from IPO	$	276,000,000
Less:
Proceeds allocated to Public Warrants, net of offering costs		(13,708,000)
Ordinary share issuance costs		(15,663,595)
Plus:
Remeasurement of carrying value to redemption value		29,384,940
Ordinary shares subject to possible redemption, December 31, 2021		276,013,345
Plus:
Remeasurement of carrying value to redemption value		414,541
Ordinary shares subject to possible redemption, June 30, 2022	$	276,427,886

Net Income per Ordinary Shares

The Company has two classes of shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Earnings and losses are shared pro rata between the two classes of shares. Private and public warrants to purchase 14,213,333 Class A ordinary shares at $11.50 per share were issued on February 11, 2021. No warrants were exercised during the three and six months ended June 30, 2022 and 2021. The calculation of diluted income per ordinary share does not consider the effect of the warrants issued in connection with the (i) IPO, (ii) exercise of over-allotment, and (iii) Private Placement since the exercise of the warrants are contingent upon the

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occurrence of future events. As a result, diluted net income per common share is the same as basic net income per common share for the periods.

SEC Form 10-Q filed by Crown PropTech Acquisitions