UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 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

September 30, 2021

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

Commission File Number: 001-40845

Parabellum Acquisition Corp.

(Exact Name of Registrant as Specified in its Charter)


Delaware		86-2219674
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
3811 Turtle Creek Blvd., Suite 2125 Dallas, TX		75219
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (972)591-8349

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Units, each consisting of one share of Class A common stock, $0.0001 par value, and three-quarters of one redeemable warrant	PRBM.U	The New York Stock Exchange
Class A common stock, par value $0.0001 per share	PRBM	The New York Stock Exchange
Redeemable warrants, each full warrant exercisable for one share of Class A common stock at an exercise price of $11.50 per share	PRBM.WS	The 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, 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 November 1, 2021, the registrant had 4,909,265 shares of Class A common stock, $0.0001 par value, outstanding.


		Page
PART I. FINANCIAL INFORMATION
Item 1.	Condensed Financial Statements (Unaudited)	1
	Condensed Balance Sheet	1
	Condensed Statements of Operations	2
	Condensed Statements of Stockholders’ Equity (Deficit)	3
	Condensed Statement of Cash Flows	4
	Notes to Unaudited 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	25
Item 4.	Controls and Procedures	25
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 3.	Defaults Upon Senior Securities	27
Item 4.	Mine Safety Disclosures	27
Item 5.	Other Information	27
Item 6.	Exhibits	28
Signatures		29


	September 30, 2021
Assets
Current assets
Cash	$	2,333,553
Prepaid expenses		26,800
Total current assets		2,360,353
Other assets
Cash held in trust account		126,250,000
Total Assets	$	128,610,353

Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable	$	85,431
Accrued offering costs		323,500
Total current liabilities		408,931
Warrant liability		10,749,950
Deferred underwriting fee payable		4,375,000
Total liabilities		15,533,881

Commitments and Contingencies

Class A common stock subject to possible redemption; 12,500,000 shares at redemption value of $10.10		126,250,000

Stockholders' Equity (Deficit):
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding		—
Class A common stock, $0.0001 par value, 100,000,000 shares authorized; no shares issued or outstanding (excluding 12,500,000 subject to possible redemption)		—
Class B common stock; $0.0001 par value, 10,000,000 shares authorized; 3,593,750 shares issued and outstanding (1)		359
Additional paid-in-capital		—
Accumulated deficit		(13,173,887)
Total Stockholders' deficit		(13,173,528)
Total Liabilities and Stockholders' Deficit	$	128,610,353


			For the period from
	For the Three		February 5, 2021
	Months Ended		(inception) through
	September 30,		September 30,
	2021		2021
Formation costs	$	—	$	10,000
Loss from operations		—		(10,000)
Other expense:
Offering costs related to Public Warrants		534,602		534,602
Net loss	$	(534,602)	$	(544,602)

Weighted average shares outstanding of Class A common stock subject to possible redemption		135,870		52,521

Basic and diluted net loss per share, Class A subject to possible redemption (see Note 2)	$	(0.16)	$	(0.20)

Weighted average shares outstanding of Class B common stock (1)		3,125,000		2,691,702

Basic and diluted net loss per share, Class B (see Note 2)	$	(0.16)	$	(0.20)



	Common Stock Subject to Possible
	Redemption			Common Stock			Additional				Total
	Class A			Class B			Paid-in		Accumulated		Shareholders'
	Shares	Amount		Shares	Amount		Capital		Deficit		Deficit
Balance - February 5, 2021 (inception)	—	$	—	—	$	—	$	—	$	—	$	—
Class B common stock issued to Sponsor (1)	—		—	3,593,750		359		24,641		—		25,000
Net loss	—		—	—		—		—		(10,000)		(10,000)
Balance - March 31, 2021	—		—	3,593,750		359		24,641		(10,000)		15,000
Net loss	—		—	—		—		—		—		—
Balance - June 30, 2021	—		—	3,593,750		359		24,641		(10,000)		15,000
Issuance of Class A common stock subject to possible redemption, net of issuance costs of $9,809,375	12,500,000		108,730,315	—		—		—		—		—
Proceeds in excess of the fair value of the private placement warrants	—		—	—		—		1,935,360		—		1,935,360
Capital contribution by the Sponsor	—		—	—		—		2,930,399		—		2,930,399
Accretion to redemption value of Class A common stock subject to possible redemption	—		17,519,685	—		—		(4,890,400)		(12,629,285)		(17,519,685)
Net loss	—		—	—		—		—		(534,602)		(534,602)
Balance - September 30, 2021	12,500,000	$	126,250,000	3,593,750	$	359	$	—	$	(13,173,887)	$	(13,173,528)


Cash Flows from Operating Activities
Net loss	$	(544,602)
Adjustments to reconcile net loss to net cash used in operating activities:
Offering costs associated with warrant liability		534,602
Changes in current assets and liabilities:
Prepaid expenses		(26,800)
Net cash used in operating activities		(36,800)

Cash Flows from Investing Activities
Investment of cash into Trust Account		(126,250,000)
Net cash used in investing activities		(126,250,000)

Cash Flows from Financing Activities
Proceeds from issuance of Promissory Note		150,000
Payment of Promissory Note		(150,000)
Proceeds from issuance of Public Units		125,000,000
Proceeds from issuance of Private Placement Warrants		6,225,000
Proceeds from issuance of Founders shares		25,000
Payment of offering costs		(2,629,647)
Net cash provided by financing activities		128,620,353

Cash — beginning of period		—
Cash — end of period	$	2,333,553

Supplemental disclosure of cash flow information:
Offering costs through the transfer of the Class B common stock	$	2,930,400
Offering costs included in accrued offering costs and accounts payable	$	408,931
Deferred underwriting fees payable	$	4,375,000


Three-months Ended	Class A subject to
September 30, 2021	possible redemption		Class A		Class B
Allocation of undistributable losses		(22,275)		—		(512,327)
Net loss to shares of Class A common stock	$	(22,275)	$	—	$	(512,327)

Weighted average shares outstanding, basic and diluted		135,870		—		3,125,000

Basic and diluted net loss per share	$	(0.16)		—	$	(0.16)


Inception-to-Date	Class A subject to
September 30, 2021	possible redemption		Class A		Class B
Allocation of undistributable losses		(10,423)		—		(534,179)
Net loss to shares of Class A common stock	$	(10,423)	$	—	$	(534,179)

Weighted average shares outstanding, basic and diluted		52,521				2,691,702

Basic and diluted net loss per share	$	(0.20)		—	$	(0.20)


		September 30,
Description	Level	2021
Assets:
Cash held in Trust Account	1	$	126,250,000

Liabilities:
Warrant liability- Public Warrants	3	$	6,460,310
Warrant liability- Private Placement Warrants	3	$	4,289,640


	September 30,
	2021 (Initial
	Measurement)
Stock price	$	9.95
Exercise price	$	11.50
Expected term (in years)		6.25
Volatility		17.7	%
Risk-free rate		1.32	%
Dividend yield		0.0	%


	Private				Warrant
	Placement		Public		Liabilities
Fair value as of February 5, 2021 (inception)	$	—	$	—	$	—

Initial measurement on September 30, 2021		4,289,640		6,460,310		10,749,950

Fair value as of September 30, 2021	$	4,289,640	$	6,460,310	$	10,749,950


Exhibit Number		Description

31.1*		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (embedded within the Inline XBRL document)


	Company Name

Date: November 15, 2021	By:	/s/ Narbeh Derhacobian
		Narbeh Derhacobian
		Chief Executive Officer, President and Secretary (Principal Executive Officer)

Date: November 15, 2021	By:	/s/ Ron Shelton
		Ron Shelton
		Chief Financial Officer (Principal Financial and Accounting Officer)

SEC Form 10-Q filed by Parabellum Acquisition Corp.