UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

(Amendment No.1)

(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

For the transition period from to

Commission File Number: 001-39847

POWERED BRANDS

(Exact name of registrant as specified in its charter)

Cayman Islands

98-1570855

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification Number)

, NY

292 Madison Avenue, 8^th Floor

New York, NY

10017

(Address of principal executive offices)

(Zip Code)

(212) 756-3508

(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
Units, each consisting of one Class A ordinary share and one-third of a Warrant to acquire one Class A ordinary share	POWRU	The NASDAQ Capital Market

Class A ordinary shares, par value $0.0001	POW	The NASDAQ Capital Market

Warrants, each whole warrant exercisable for one Class A ordinary share at an exercise price of $11.50	POWRW	The NASDAQ Capital Market

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 March 8, 2022, 3,516,615 units, each consisting of one Class A ordinary share, par value $0.0001 per share, and one-third of a warrant to acquire one Class A ordinary share, 24,083,385 Class A ordinary shares, 6,900,000 Class B ordinary shares, par value $0.0001 per share, and 13,207,671 warrants were issued and outstanding.

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EXPLANATORY NOTE

References throughout this Amendment No. 1 to the Quarterly Report on Form 10-Q/A to “we,” “us,” the “Company” or “our company” are to Powered Brands unless the context otherwise indicates.

This Amendment No. 1 to the Quarterly Report on Form 10-Q/A (“Amendment No. 1”) amends the Quarterly Report on Form 10-Q of Powered Brands as of and for the period ended September 30, 2021, as filed with the Securities and Exchange Commission (“SEC”) on November 15, 2021 (the “Original Filing”).

The interim financial statements in the Original Filing included a section within Note 2, Revision of Previously Reported Financial Statements, (“Note 2”) that described a revision to the Company’s classification of its Class A ordinary shares subject to redemption issued as part of the units sold in the Company’s initial public offering (“IPO”) on January 12, 2021. As described in Note 2, upon its IPO, the Company classified a portion of the Class A ordinary shares as permanent equity to maintain net tangible assets greater than $5,000,000 on the basis that the Company will consummate its initial business combination only if the Company has net tangible assets of at least $5,000,001. Previously, the Company did not consider redeemable stock classified as temporary equity as part of net tangible assets. Effective with these financial statements, the Company revised this interpretation to include temporary equity in net tangible assets. As a result, the Company's management determined that the Class A Shares included certain provisions that require classification of the Class A Shares as temporary equity. As a result, management corrected the error by restating all Class A ordinary shares subject to redemption as temporary equity. This resulted in an adjustment to the initial carrying value of the Class A ordinary shares subject to possible redemption with the offset recorded to additional paid-in capital (to the extent available), accumulated deficit and Class A ordinary shares.

In connection with the change in presentation for the Class A ordinary shares subject to possible redemption, the Company revised its earnings per share calculation to allocate income and losses shared pro rata between the two classes of shares. This presentation differs from the previously presented method of earnings per share, which was similar to the two-class method.

The Company determined the changes were not qualitatively material to the Company’s previously issued financial statements and did not restate its financial statements. Instead, the Company revised its previously reported financial statements within Note 2 in the Original Filing. Although the qualitative factors that management assessed tended to support a conclusion that the misstatements were not material, these factors were not strong enough to overcome the significant quantitative errors in the financial statements. Management concluded that the misstatement was such of magnitude that it is probable that the judgment of a reasonable person relying upon the financial statements would have been influenced by the inclusion or correction of the foregoing items. As such, upon further consideration of the change, the Company determined the change in classification of the Class A ordinary shares and change to its presentation of earnings per share is material quantitatively and it should restate its previously issued financial statements.

Therefore, on March 2, 2022, the Company’s management and the audit committee of the Company’s board of directors (the “Audit Committee”) concluded that the Company’s previously reported revision to the (i) unaudited interim financial statements included in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021, filed with the SEC on June 3, 2021; (ii) unaudited interim financial statements included in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2021, filed with the SEC on August 13, 2021; and (iii) Note 2 to the unaudited interim financial statements for the quarterly period ended September 30, 2021 and Item 4 of Part I included in the Company’s Original Filing (collectively, the “Affected Periods”), should be restated to report all Public Shares (as defined herein) as temporary equity and should no longer be relied upon. As such, the Company has restated the financial statements of the Affected Periods in this Amendment No. 1 to the Quarterly Report on Form 10-Q/A.

The restatement does not have an impact on its cash position and cash held in the trust account established in connection with the IPO (the “Trust Account”).

After re-evaluation, the Company’s management has concluded that in light of the errors described above, a material weakness existed in the Company’s internal control over financial reporting during the Affected Periods and that the Company’s disclosure controls and procedures were not effective. The Company’s remediation plan with respect to such material weakness is described in more detail in the Item 4 – Controls and Procedures, contained herein.

We are filing this Amendment No. 1 to amend and restate the Original Filing with modification as necessary to reflect the restatements. The following items have been amended to reflect the restatements:

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Part I, Item 1. Condensed Financial Statements

Part I, Item 4. Controls and Procedures

Part II, Item 1A. Risk Factors

In addition, the Company’s Chief Executive Officer and Chief Financial Officer have provided new certifications dated as of the date of this filing in connection with this Amendment No. 1 (Exhibits 31.1, 31.2, 32.1 and 32.2).

Except as described above, no other information included in the Original Filing is being amended or updated by this Amendment No. 1 and, other than as described herein, this Amendment No. 1 does not purport to reflect any information or events subsequent to the Original Filing. We have not amended our previously filed Quarterly Reports on Form 10-Q for the periods affected by the restatement. This Amendment No. 1 continues to describe the conditions as of the date of the Original Filing and, except as expressly contained herein, we have not updated, modified or supplemented the disclosures contained in the Original Filing. Accordingly, this Amendment No. 1 should be read in conjunction with the Original Filing and with our filings with the SEC subsequent to the Original Filing.

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POWERED BRANDS

Quarterly Report on Form 10-Q/A

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		Page No.
PART I. FINANCIAL INFORMATION
Item 1.	Condensed Financial Statements	1
	Condensed Balance Sheets as of September 30, 2021 (unaudited) and December 31, 2020	1
	Unaudited Condensed Statements of Operations for the Three and Nine Months Ended September 30, 2021	2
	Unaudited Condensed Statements of Changes in Shareholders’ Deficit for the Three and Nine Months Ended September 30, 2021	3
	Unaudited Condensed Statement of Cash Flows for the Nine Months Ended September 30, 2021	4
	Notes to Unaudited Condensed Financial Statements (as restated)	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures (as restated)	26
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities	28
Item 3.	Defaults Upon Senior Securities	28
Item 4.	Mine Safety Disclosures	28
Item 5.	Other Information	28
Item 6.	Exhibits	29
SIGNATURES		30

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PART I - FINANCIAL INFORMATION

Item 1. Condensed Financial Statements.

POWERED BRANDS

CONDENSED BALANCE SHEETS


	September 30, 2021		December 31, 2020
	(unaudited)
Assets:
Current assets:
Cash	$	555,212	$	—
Due from related party		61,901		—
Prepaid expenses		383,736		—
Total current assets		1,000,849		—
Investments held in Trust Account		276,019,285		—
Deferred offering costs associated with the initial public offering		—		419,962
Total Assets	$	277,020,134	$	419,962

Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders' Deficit:
Current liabilities:
Accounts payable	$	161,359	$	23,450
Accrued expenses		107,003		333,517
Note payable - related party		—		66,000
Total current liabilities		268,362		422,967
Deferred underwriting commissions		9,660,000		—
Derivative warrant liabilities		9,203,200		—
Total Liabilities		19,131,562		422,967

Commitments and Contingencies

Class A ordinary shares subject to possible redemption, $0.0001 par value; 27,600,000 and 0 shares at $10.00 per share at redemption value as of September 30, 2021 and December 31, 2020, respectively		276,000,000		—

Shareholders' Deficit:
Preference shares, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding as of September 30, 2021 and December 31, 2020		—		—
Class A ordinary shares, $0.0001 par value; 350,000,000 shares authorized; no non-redeemable shares issued or outstanding as of September 30, 2021 and December 31, 2020		—		—
Class B ordinary shares, $0.0001 par value; 150,000,000 shares authorized; 6,900,000 shares issued and outstanding as of September 30, 2021 and December 31, 2020		690		690
Additional paid-in capital		—		24,310
Accumulated deficit		(18,112,118)		(28,005)
Total Shareholders’ Deficit		(18,111,428)		(3,005)
Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit	$	277,020,134	$	419,962

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

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POWERED BRANDS

UNAUDITED CONDENSED STATEMENTS OF OPERATIONS

For the Three and Nine Months Ended September 30, 2021


	Three Months Ended		Nine Months Ended
	September 30, 2021		September 30, 2021
General and administrative expenses	$	259,516	$	737,710
General and administrative expenses - related party		139,010		139,010
Loss from operations		(398,526)		(876,720)

Other income (expense)
Change in fair value of derivative warrant liabilities		4,889,200		3,646,800
Transaction costs associated with issuance of warrants		—		(479,738)
Income from investments held in Trust Account		6,958		19,285
Total other income, net		4,896,158		3,186,347
Net income	$	4,497,632	$	2,309,627

Weighted average shares outstanding of Class A ordinary shares, basic and diluted		27,600,000		26,487,912
Basic and diluted net income per share, Class A ordinary shares	$	0.13	$	0.07

Weighted average shares outstanding of Class B ordinary shares, basic		6,900,000		6,863,736
Weighted average shares outstanding of Class B ordinary shares, diluted		6,900,000		6,900,000
Basic and diluted net income per share, Class B ordinary shares	$	0.13	$	0.07

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

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POWERED BRANDS

UNAUDITED CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT

For the Three and Nine Months Ended September 30, 2021


	Ordinary Shares						Additional				Total
	Class A			Class B			Paid-in				Shareholders’
	Shares	Amount		Shares	Amount		Capital		Accumulated Deficit		Deficit
Balance - January 1, 2021	—	$	—	6,900,000	$	690	$	24,310	$	(28,005)	$	(3,005)
Excess of cash received over fair value of private placement warrants	—		—	—		—		3,108,000		—		3,108,000
Accretion of Class A ordinary shares subject to redemption amount	—		—	—		—		(3,132,310)		(20,393,740)		(23,526,050)
Net income	—		—	—		—		—		1,318,311		1,318,311
Balance - March 31, 2021 (as restated)	—		—	6,900,000		690		—		(19,103,434)		(19,102,744)
Net loss	—		—	—		—		—		(3,506,316)		(3,506,316)
Balance – June 30, 2021 (as restated)	—		—	6,900,000		690		—		(22,609,750)		(22,609,060)
Net income	—		—	—		—		—		4,497,632		4,497,632
Balance – September 30, 2021 (unaudited)	—	$	—	6,900,000	$	690	$	—	$	(18,112,118)	$	(18,111,428)

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

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POWERED BRANDS

UNAUDITED CONDENSED STATEMENT OF CASH FLOWS

For the Nine Months Ended September 30, 2021


Cash Flows from Operating Activities:
Net income	$	2,309,627
Adjustments to reconcile net income to net cash used in operating activities:
Change in fair value of derivative warrant liabilities		(3,646,800)
Transaction costs associated with issuance of warrants		479,738
Income from investments held in Trust Account		(19,285)
Changes in operating assets and liabilities:
Due from related party		(61,901)
Prepaid expenses		(356,936)
Accounts payable		118,024
Accrued expenses		33,998
Net cash used in operating activities		(1,143,535)

SEC Form 10-Q/A filed by Powered Brands (Amendment)