10-Q 1 d389517d10q.htm FORM 10-Q Form 10-Q
Table of Contents
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM
10-Q
 
 
 
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2022
OR
 
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
    
    
    
    
to
    
    
    
    
 
 
TB SA ACQUISITION CORP
(Exact name of registrant as specified in its charter)
 
 
 
Cayman Islands
  
001-40260
  
N/A
(State or other jurisdiction of
incorporation or organization)
  
(Commission
File Number)
  
(I.R.S. Employer
Identification No.)
 
PO Box 1093, Boundary Hall
Cricket Square
Grand Cayman, Cayman Islands
  
KY1-1102
(Address of principal executive offices)
  
(Zip Code)
(345)814-5771
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, $0.0001 par value, and
one-third
of one redeemable warrant to acquire one Class A ordinary share
  
TBSAU
  
The NASDAQ Stock Market LLC
Class A ordinary shares included as part of the units
  
TBSA
  
The NASDAQ Stock Market LLC
Redeemable warrants, each warrant exercisable for one Class A ordinary share, each at an exercise price of $11.50 per share
  
TBSAW
  
The NASDAQ Stock Market LLC
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, anon-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 14, 2022,
 
20,000,000
Class A ordinary shares, $0.0001 par value and
5,000,000
Class B ordinary shares, $0.0001 par value, were issued and outstanding.
 
 
 

Table of Contents

TB SA ACQUISITION CORP

Form10-Q

For the Period Ended September 30, 2022

Table of Contents

 

          Page  
PART I. FINANCIAL INFORMATION   
Item 1.   

Condensed Financial Statements

      1  
  

Condensed Balance Sheets as of September 30, 2022 (Unaudited) and December 31, 2021

      1  
  

Unaudited Condensed Statements of Operations for the three and nine months ended September 30, 2022 and for the three months ended September 30, 2021 and for the period from January 27, 2021 (Inception) through September 30, 2021

      2  
  

Unaudited Condensed Statements of Changes in Shareholders’ Deficit for the three and nine months ended September 30, 2022 and for the three months ended September 30, 2021 and for the period from January 27, 2021 (Inception) through September 30, 2021

      3  
  

Unaudited Condensed Statements of Cash Flows for the nine months ended September 30, 2022 and for the period from January 27, 2021 (Inception) through September 30, 2021

      4  
  

Notes to Unaudited Condensed Financial Statements

      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

      28  
Item 4.   

Controls and Procedures

      28  
PART II. OTHER INFORMATION   
Item 1.   

Legal Proceedings

      31  
Item 1A.   

Risk Factors

      31  
Item 2.   

Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities

      31  
Item 3.   

Defaults Upon Senior Securities

      31  
Item 4.   

Mine Safety Disclosures

      31  
Item 5.   

Other Information

      31  
Item 6.   

Exhibits

      32  

 

Table of Contents
0.250.250.500.250.500.50
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
TB SA ACQUISITION CORP
CONDENSED BALANCE SHEETS
 
    
September 30,
2022

(Unaudited)
    
December 31,

2021
  
Assets
                 
Current assets:
                 
Cash
    $ 46,836     $ 252,323  
Prepaid expenses
      285,510       555,000  
    
 
 
    
 
 
  
Total current assets
   
 
332,346
 
  
 
807,323
 
Marketable securities held in Trust account
      201,207,702       200,014,773  
Prepaid
expenses, non-current
      —         123,164  
    
 
 
    
 
 
  
Total assets
   
$
201,540,048
 
  
$
200,945,260
 
    
 
 
    
 
 
  
Liabilities and Shareholders’ Equity
                 
Current liabilities:
                 
Accounts payable and accrued expenses
    $ 1,907,900     $ 1,582,505  
Due to related party
      378,987       243,038  
    
 
 
    
 
 
  
Total current liabilities
   
 
2,286,887
 
  
 
1,825,543
 
Convertible note - related party
      518,000       —    
Warrant liabilities
      550,000       5,610,000  
    
 
 
    
 
 
  
Total liabilities
   
 
3,354,887
 
  
 
7,435,543
 
    
 
 
    
 
 
  
Commitments and Contingencies (See Note 6)
                 
Class A ordinary shares subject to possible redemption, 20,000,000 shares at redemption value of $10.06 and $10.00 per share at September 30, 2022 and December 31, 2021, respectively
      201,207,702       200,014,773  
Shareholders’ Equity (Deficit):
                 
Preference shares, $0.0001 par value; 5,000,000 shares authorized; none issued and outstanding
      —         —    
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; none issued and outstanding (excluding 20,000,000 shares subject to possible redemption)
      —         —    
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 5,000,000 shares issued and outstanding
      500       500  
Additional paid-in capital
      796,651       267,150  
Accumulated deficit
      (3,819,692 )      (6,772,706 ) 
    
 
 
    
 
 
  
Total Shareholders’ Deficit
   
 
(3,022,541
) 
  
 
(6,505,056
) 
    
 
 
    
 
 
  
Total Liabilities and Shareholders’ Deficit
   
$
201,540,048
 
  
$
200,945,260
 
    
 
 
    
 
 
  
The accompanying notes are an integral part of these unaudited condensed financial statements.
 
 
1
TB SA ACQUISITION CORP
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
 
    
For the three

months ended

September 30,
2022
    
For the three

months ended

September 30,
2021
    
For the nine

months ended

September 30,
2022
    
For the period

from
January 27, 2021

(Inception)

through

September 30,
2021
  
Formation and operating costs
    $ 382,123     $ 1,103,855     $ 1,634,485     $ 1,518,441  
Stock compensation expense
      41,128       —         486,501       267,150  
    
 
 
    
 
 
    
 
 
    
 
 
  
Loss from operations
   
 
(423,251
) 
  
 
(1,103,855
) 
  
 
(2,120,986
) 
  
 
(1,785,591
) 
Other Income
                                 
Interest earned on marketable securities held in Trust Account
      902,784       3,413       1,192,929       10,548  
Offering expenses related to warrant issuance
      —         —         —         (233,453 ) 
Change in fair value of working capital loan—related party
      7,000       —         14,000       —    
Change in fair value of over-allotment liability
      —         —         —         10,676  
Change in fair value of warrant liabilities
      703,333       4,620,000       5,060,000       8,689,999  
    
 
 
    
 
 
    
 
 
    
 
 
  
Total other income, net
      1,613,117       4,623,413       6,266,929       8,477,770  
    
 
 
    
 
 
    
 
 
    
 
 
  
Net income
   
$
1,189,866
 
  
$
3,519,558
 
  
$
4,145,943
 
  
$
6,692,179
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Weighted average shares outstanding of Class A ordinary share
      20,000,000       20,000,000       20,000,000       15,384,615  
    
 
 
    
 
 
    
 
 
    
 
 
  
Basic and diluted net income per share, Class A ordinary share
   
$
0.05
 
  
$
0.14
 
  
$
0.17
 
  
$
0.33
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Weighted average shares outstanding of Class B ordinary share
      5,000,000       5,000,000       5,000,000       4,898,785  
    
 
 
    
 
 
    
 
 
    
 
 
  
Basic and diluted net income per share, Class B ordinary share
   
$
0.05
 
  
$
0.14
 
  
$
0.17
 
  
$
0.33
 
    
 
 
    
 
 
    
 
 
    
 
 
  
The accompanying notes are an integral part of these unaudited condensed financial statements.
 
2
TB SA ACQUISITION CORP
UNAUDITED CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022
 
    
Ordinary Shares
     
Additional

Paid-In

Capital
     
Accumulated
Deficit
    
Total

Shareholders’

Deficit
  
    
Class A
     
Class B
  
    
Shares
     
Amount
     
Shares
     
Amount
  
Balance as of January 1, 2022
   
 
—  
 
   
$
—  
 
   
 
5,000,000
 
   
$
500
 
   
$
267,150
 
   
$
(6,772,706
) 
  
$
(6,505,056
) 
Remeasurement of Class A ordinary shares to redemption value
      —          —          —          —          —          (20,058 )      (20,058 ) 
Proceeds received in excess of initial fair value of working capital loan—related party
      —          —          —          —          20,000        —         20,000  
Fair value of Founder Shares transferred to Directors
      —          —          —          —          267,150        —         267,150  
Net income
      —          —          —          —          —          2,082,339       2,082,339  
Balance as of March 31, 2022
   
 
—  
 
   
 
—  
 
   
 
5,000,000
 
   
 
500
 
   
 
554,300
 
   
 
(4,710,425
) 
  
 
(4,155,625
) 
    
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
    
 
 
  
Remeasurement of Class A ordinary shares to redemption value
      —          —          —          —          —          (270,087 )      (270,087 ) 
Proceeds received in excess of initial fair value of working capital loan - related party
      —          —          —          —          23,000        —         23,000  
Fair value of Founder Shares transferred to Directors
      —          —          —          —          178,223        —         178,223  
Net income
      —          —          —          —          —          873,738       873,738  
Balance as of June 30, 2022
   
 
—  
 
   
 
—  
 
   
 
5,000,000
 
   
 
500
 
   
 
755,523
 
   
 
(4,106,774
) 
  
 
(3,350,751
) 
Fair value of Founder Shares transferred to Directors
      —          —          —          —          41,128        —         41,128  
Remeasurement of Class A ordinary shares to redemption value
      —          —          —          —          —          (902,784 )      (902,784 ) 
Net income
      —          —          —          —          —          1,189,866       1,189,866  
    
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
    
 
 
  
Balance as of September 30, 2022
   
 
—  
 
   
$
—  
 
   
 
5,000,000
 
   
$
500
 
   
$
796,651
 
   
$
(3,819,692
) 
  
$
(3,022,541
) 
    
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
    
 
 
  
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2021 AND
FOR THE PERIOD FROM JANUARY 27, 2021 (INCEPTION) THROUGH SEPTEMBER 30, 2021
 
    
Ordinary Shares
    
Additional

Paid-In

Capital
    
Accumulated
Deficit
    
Total

Shareholders’

Deficit
  
    
Class A
     
Class B
  
    
Shares
     
Amount
     
Shares
    
Amount
  
Balance as of January 27, 2021 (Inception)
   
 
—  
 
   
$
 —  
 
   
 
—  
 
  
$
 —  
 
  
$
 —  
 
  
$
 —  
 
  
$
 —  
 
Issuance of Founder Shares
      —          —          5,750,000       575       24,425       —         25,000  
Excess Sponsor paid over Fair value of Private Placement Warrants
      —          —          —         —         563,334       —         563,334  
Remeasurement of Class A ordinary shares to redemption value
      —          —          —         —         (587,759 )      (13,094,838 )      (13,682,597 ) 
Fair value of Founder Shares transferred to Directors
      —          —          —         —         267,150       —         267,150  
Net loss
      —          —          —         —         —         (14,862 )      (14,862 ) 
    
 
 
     
 
 
     
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Balance as of March 31, 2021
   
 
—  
 
   
$
—  
 
   
 
5,750,000
 
  
$
575
 
  
$
267,150
 
  
$
(13,109,700
) 
  
$
(12,841,975
) 
Forfeiture of Founder Shares
      —          —          (750,000 )      (75 )      75       —         —    
Remeasurement of Class A ordinary shares to redemption value
      —          —          —         —         (75 )      (7,060 )      (7,135 ) 
Net income
      —          —          —         —         —         3,187,483       3,187,483  
    
 
 
     
 
 
     
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Balance as of June 30, 2021
   
 
—  
 
   
$
—  
 
   
 
5,000,000
 
  
$
500
 
  
$
267,150
 
  
$
(9,929,277
) 
  
$
(9,661,627
) 
Remeasurement of Class A ordinary shares to redemption value
      —          —          —         —         —         (3,413 )      (3,413 ) 
Net income
      —          —          —         —         —         3,519,558       3,519,558  
    
 
 
     
 
 
     
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Balance as of September 30, 2021
   
 
—  
 
   
$
—  
 
   
 
5,000,000
 
  
$
500
 
  
$
267,150
 
  
$
(6,413,132
) 
  
$
(6,145,482
) 
    
 
 
     
 
 
     
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
The accompanying notes are an integral part of these unaudited condensed financial statements.
 
3
TB SA ACQUISITION CORP
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
 
    
For the nine
months

ended

September 30,
2022
    
For the period

from January 27,

2021 (Inception)

Through
September 30,
2021
  
Cash Flows from Operating Activities:
                 
Net income
    $ 4,145,943     $ 6,692,179  
Adjustments to reconcile net income to net cash used in operating activities:
                 
Offering costs allocated to Warrants
      —         233,453  
Change in fair value of warrant liabilities
      (5,060,000 )      (8,689,999 ) 
Change in fair value of working capital loan—related party
      (14,000 )      —    
Change in fair value of over-allotment liabilities
      —         (10,676 ) 
Stock compensation expense
      486,501       267,150  
Interest earned on marketable securities held in Trust Account
      (1,192,929 )      (10,548 ) 
Changes in current assets and current liabilities:
                 
Prepaid assets
      392,654       (837,958 ) 
Accounts payable and accrued expenses
      325,395       964,000  
Due to related party
      135,949       126,065  
    
 
 
    
 
 
  
Net cash used in operating activities
   
 
(780,487
) 
  
 
(1,266,334
) 
    
 
 
    
 
 
  
Cash Flows from Investing Activity:
                 
Investment of cash into Trust Account
      —         (200,000,000 ) 
    
 
 
    
 
 
  
Net cash provided by (used in) investing activity
      —      
 
(200,000,000
) 
    
 
 
    
 
 
  
Cash Flows from Financing Activities:
                 
Proceeds from Initial Public Offering, net of underwriter’s discount
      —         196,000,000  
Proceeds from purchase of Private Placement Warrants by related party
      —         6,500,001  
Proceeds from issuance of Working Capital Loan—related party
      575,000       —    
Proceeds from issuance of Promissory note—related party
      —         133,541  
Payments of Promissory note—related party
      —         (133,541 ) 
Proceeds from issuance of Founder Shares
      —         25,000  
Payment of offering costs
      —         (772,041 ) 
    
 
 
    
 
 
  
Net cash provided by financing activities
   
 
575,000
 
  
 
201,752,960
 
    
 
 
    
 
 
  
Net Change in Cash
   
 
(205,487
) 
  
 
486,626
 
Cash—Beginning
      252,323       —    
    
 
 
    
 
 
  
Cash—Ending
   
$
46,836
 
  
$
486,626
 
    
 
 
    
 
 
  
Supplemental Disclosure of Non-Cash Financing
Activity:
                 
Proceeds received in excess of initial fair value of working capital loan—related party
    $ 43,000     $  —    
    
 
 
    
 
 
  
Remeasurement of Class A ordinary shares subject to possible redemption
    $ 1,192,929     $ 13,693,145  
    
 
 
    
 
 
  
The accompanying notes are an integral part of these unaudited condensed financial statements.
 
 
4
TB SA ACQUISITION CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 1 — Organization and Business Operations
Organization and General
TB SA Acquisition Corp (the “Company”) was incorporated as a Cayman Islands exempted company on January 27, 2021. 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 (the “Business Combination”). The Company is not limited to a particular industry or geographic region for purposes of consummating its 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 September 30, 2022, the Company had not yet commenced any operations. All activity through September 30, 2022, relates to the Company’s formation and preparation for its initial public offering (“Initial Public Offering” or “IPO”) described below. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company generates
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 March 22, 2021 (the “Effective Date”). On March 25, 2021, the Company consummated the IPO of 20,000,000 units (the “Units” and, with respect to the Class A ordinary shares included in the Units sold, the “public shares”), at $10.00 per Unit, generating gross proceeds of $200,000,000, which is discussed in Note 3.
Simultaneously with the closing of the IPO, the Company consummated the sale of 4,333,334 warrants (each, a “Private Placement Warrant” and collectively, the “Private Placement Warrants”) at a price of $1.50 per Private Placement Warrant, which is discussed in Note 4.
Transaction costs amounted to $4,772,041 consisting of $4,000,000 of underwriting fees and $772,041 of other offering costs. Of the total transaction cost $233,453 was reclassified to expense as
non-operating
expense in the condensed statements of operations with the rest of the offering costs charged to shareholders’ deficit. The transaction costs were allocated based on the relative fair value basis, compared to the total offering proceeds, between the fair value of the public warrant liabilities and the Class A ordinary shares.
Trust Account
Following the closing of the IPO on March 25, 2021, an amount of $200,000,000 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 (the “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 of 1940, as amended (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 Warrants 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 its 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.
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 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 business or otherwise acquires a controlling interest in the target business 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.
 
5
TB SA ACQUISITION CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 
The Company
will provide its public shareholders 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 shareholder 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 shareholder approval of a proposed initial Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The shareholders 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 the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity” (“ASC 480”). 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 shareholder 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 shareholder 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, TCP SA, LLC, a Cayman Islands limited liability company (the “Sponsor”), officers and directors have agreed to (i) waive their redemption rights with respect to their Founder Shares (as defined below), Private Placement Warrants 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 shareholder 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 Warrants if the Company fails to complete the initial Business Combination within the Combination Period.
The 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 underwriter of the IPO against certain liabilities, including liabilities under the Securities Act of 1933, as amended (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 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 and Going Concern Consideration
As of September 30, 2022, the Company had $46,836 in its operating bank account, and a working capital deficiency of $1,954,541. 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 September 30, 2022, none of the amount in the Trust Account was available to be withdrawn as described above.
The Company’s liquidity needs were satisfied through receipt of $25,000 from the sale of the Founder Shares and the net proceeds from the consummation of the Private Placement not held in the Trust Account. In addition, the Company’s Sponsor has agreed to loan the Company up to $1,500,000 in funds as may be required (“Working Capital Loans”). Such Working Capital Loans are evidenced by convertible promissory notes. The notes would either be repaid upon consummation of a business combination, without interest, or, at the lender’s discretion, or converted upon consummation of a business combination into additional Private Warrants equal to $1.50 per Private Warrant. As of September 30, 2022, and December 31, 2021, $575,000 and $0, respectively, was drawn on the Working Capital Loan, presented at its fair value of $518,000 and $0, respectively (See Note 5).
Until consummation of its Business Combination, the Company will be using the funds not held in the Trust Account, and any additional Working Capital Loans (as defined in Note 5) from the initial shareholders, the Company’s officers and directors, or their respective affiliates (which is described in Note 5), for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the Business
Combination.
 
6
TB SA ACQUISITION CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 
The Company
 
has performed an assessment of going concern considerations in accordance with Financial Accounting Standards Board’s Accounting Standards Codification Topic
205-40,
“Presentation of Financial Statements —  Going Concern.” The Company has until March 22, 2023, to consummate an initial Business Combination. It is uncertain that it will be able to consummate an initial Business Combination by this time. If an initial Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution of the Company. Additionally, the Company may not have sufficient liquidity to fund the working capital needs of the Company through one year from the issuance of these unaudited condensed financial statements. The Company has determined that the liquidity condition and mandatory liquidation, should an initial Business Combination not occur, and potential subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after March 22, 2023.
Risks and Uncertainties
Results of operations and the Company’s ability to complete the Proposed 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 its control. The 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 our business and our ability to complete an initial business combination.
Note 2 — Significant Accounting Policies
Basis of Presentation
The accompanying unaudited 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 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 nine months ended September 30, 2022 is not necessarily indicative of the results that may be expected through December 31, 2022.
The accompanying unaudited 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 May 4, 2022.
Emerging Growth Company Status
The Company is an “emerging growth company,” as defined in Section 2(a) of 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 of 2002, 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 shareholder 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 an emerging growth 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 unaudited condensed 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.
 
7

TB SA ACQUISITION CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 
Use of Estimates
The preparation of the unaudited condensed financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Two of the more significant accounting estimates included in these financial statements is the determination of the fair value of the warrant liabilities and convertible promissory note. Such estimates may be subject to change as more current information becomes available and, accordingly, the actual results could differ significantly 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. The Company did not have any cash equivalents as of September 30, 2022 and December 31, 2021.
Marketable Securities Held in Trust Account
At September 30, 2022 and December 31, 2021, the Trust Account had $201,207,702 and $200,014,773 held in money market funds, respectively, which are invested primarily in U.S. Treasury securities. For the period from January 27, 2021 (inception) through September 30, 2022, the Company did not withdraw any interest income from the Trust Account to pay its tax obligations. All of the Company’s investments held in the Trust Account are classified as trading securities. Trading securities are presented on the condensed balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held in the Trust Account are included in interest earned on marketable securities held in Trust Account in the accompanying condensed statements of operations. The estimated fair values of investments held in Trust Account are determined using available market information.
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 Corporation coverage limit of $250,000, and investments held in the Trust Account. At September 30, 2022 and December 31, 2021, the Company has not experienced losses on this account.
Class A Ordinary Shares Subject to Possible Redemption
All of the 20,000,000 Class A ordinary shares sold as part of the Units in the IPO contain a redemption feature which allows for the redemption of such public shares in connection with the Company’s liquidation or if there is a shareholder vote or tender offer in connection with the Business Combination and in connection with certain amendments to the Company’s amended and restated memorandum and articles of association. In accordance with the SEC and its staff’s guidance on redeemable equity instruments, which has been codified in
ASC 480-10-S99, redemption
provisions not solely within the control of the Company require ordinary shares subject to redemption to be classified outside of permanent equity. Therefore, all Class A ordinary shares have been classified outside of permanent equity.
The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid in capital to the extent available and accumulated deficit.
Net Income per Ordinary Share
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. The 11,000,000 potential ordinary shares for outstanding warrants to purchase the Company’s shares were excluded from diluted net income per share for the three and nine months ended September 30, 2022, for the three months ended September 30, 2021 and for the period from January 27, 2021 (Inception) through September 30, 2021, because the warrants are contingently exercisable, and the contingencies have not yet been met. As a result, diluted net income per ordinary share is the same as basic net income per ordinary share for the periods presented.
 
8
TB SA ACQUISITION CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 
The table below presents a reconciliation of the numerator and denominator used to compute basic and diluted net income per share for each class of ordinary share:
 
    
For the three months ended

September 30, 2022
     
For the three months ended

September 30, 2021
  
    
Class A
     
Class B
     
Class A
     
Class B
  
Basic and diluted net income per share:
                                    
Numerator:
                                    
Allocation of net income
    $ 951,893      $ 237,973      $ 2,815,646      $ 703,912  
Denominator:
                                    
Weighted-average shares outstanding
      20,000,000        5,000,000        20,000,000        5,000,000  
    
 
 
     
 
 
     
 
 
     
 
 
  
Basic and diluted net income per share
    $ 0.05      $ 0.05      $ 0.14      $ 0.14  
    
 
 
     
 
 
     
 
 
     
 
 
  
 
    
For the nine months ended

September 30, 2022
     
For the period from

January 27, 2021 (inception)

through

September 30, 2021
  
    
Class A
     
Class B
     
Class A
     
Class B
  
Basic and diluted net income per share:
                                    
Numerator:
                                    
Allocation of net income
    $ 3,316,754      $ 829,189      $ 5,075,904      $ 1,616,275  
Denominator:
                                    
Weighted-average shares outstanding
      20,000,000        5,000,000        15,384,615        4,898,785  
    
 
 
     
 
 
     
 
 
     
 
 
  
Basic and diluted net income per share
    $ 0.17      $ 0.17      $ 0.33      $ 0.33  
    
 
 
     
 
 
     
 
 
     
 
 
  
Offering Costs
The Company complies with the requirements of FASB
ASC 340-10-S99-1
and SEC Staff Accounting Bulletin Topic 5A, “Expenses of Offering.” Offering costs consist principally of professional and registration fees incurred through the balance sheet date that are related to the Public Offering and that were charged to shareholders’ deficit upon the completion of the IPO. Accordingly, on March 31, 2021, offering costs totaling $4,772,041 have been charged to shareholders’ deficit (consisting of $4,000,000 of underwriting fees and $772,041 of other offering costs). Of the total transaction cost $233,453 was reclassified to expense as
a non-operating
expense in the condensed statements of operations with the rest of the offering cost charged to shareholders’ deficit. The transaction costs were allocated based on the relative fair value basis, compared to the total offering proceeds, between the fair value of the public warrant liabilities and the Class A ordinary shares.
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the condensed balance sheets.
Working Capital Loans—Related Party
The Company accounts for the loan under ASC 815, Derivatives and Hedging (“ASC 815”). Under
815-15-25,
the election can be made at the inception of a financial instrument to account for the instrument under the fair value option under ASC 825, Financial Instruments (“ASC 825”). The Company has made such election for the loan. Using the fair value option, the loan is required to be recorded at its initial fair value on the date of issuance, and each balance sheet date thereafter. Differences between the face value of the note and fair value at issuance are recognized as either an expense in the statement of operations (if issued at a premium) or as a capital contribution (if issued at a discount). Any material changes in the estimated fair value of the notes are recognized as
non-cash
gains or losses in the condensed statements of operations.
Derivative Financial Instruments
The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including issued stock purchase warrants, 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 Company accounts for its 11,000,000 ordinary share Warrants issued in connection with its IPO (6,666,666) and Private Placement (4,333,334) as derivative warrant liabilities in accordance with
ASC 815-40. Accordingly,
the Company recognizes the warrant instruments as liabilities at fair value and adjusts the instruments to fair value at each reporting period. The liabilities are subject
to re-measurement
at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s condensed statements of operations. The fair value of Warrants issued by the Company in connection with the Public Offering and Private Placement has been estimated using Monte-Carlo simulations as of the initial measurement date, and for the Private Placement Warrants, as of subsequent measurement dates (
see Note 10).
 
9

TB SA ACQUISITION CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 
The Company
granted the underwriters
a 45-day
option at the Initial Public Offering date to purchase up to 3,000,000 additional Units to cover over-allotments. The over-allotment option was evaluated under ASC 480 “Distinguishing Liabilities from Equity.” The Company concluded that the underlying transaction (Units which include redeemable shares and warrants) of the over-allotment option embodies an obligation to repurchase the issuer’s equity shares. Accordingly, the option wa
s
fair valued and recorded as a liability at issuance date with a change in fair value recorded at September 30, 2021.
Share-Based Compensation
The Company accounts for stock awards in accordance with ASC 718, “Compensation—Stock Compensation,” which requires that all equity awards be accounted for at their “fair value.” Fair value is measured on the date of grant by applying a discount based upon a) the probability of a successful business combination and b) the lack of marketability of the Founder Shares.
 
10
TB SA ACQUISITION CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 
Costs equal to these fair values are recognized ratably over the requisite service period based on the number of awards that are expected to vest, or in the period of grant for awards that vest immediately and have no future service condition. For awards that vest over time, cumulative adjustments in later periods are recorded to the extent actual forfeitures differ from the Company’s initial estimates; previously recognized compensation cost is reversed if the service or performance conditions are not satisfied, and the award is forfeited (s
ee
Note 9).
Income Taxes
The Company accounts for income taxes under FASB ASC Topic 740, “Income Taxes” (“ASC 740”), which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of September 30, 2022 and December 31, 2021, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.
The Company is considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the period presented.
Recent Accounting Standards
In August 2020, the FASB issued Accounting Standards Update (“ASU”)
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)
(“ASU
2020-06”)
to simplify accounting for certain financial instruments. ASU
2020-06
eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU
2020-06
amends the diluted earnings per share guidance, including the requirement to use the
if-converted
method for all convertible instruments. As a smaller reporting company, ASU
2020-06
is effective January 1, 2024 for fiscal years beginning after December 15, 2023 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company is currently assessing the impact, if any, that ASU
2020-06
would have on its financial position, results of operations or cash flows. The Company has not adopted this guidance as of September 30, 2022.
In June 2022, the FASB issued ASU
2022-03,
ASC Subtopic 820 “Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”. The ASU amends ASC 820 to clarify that a contractual sales restriction is not considered in measuring an equity security at fair value and to introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value. The ASU applies to both holders and issuers of equity and equity-linked securities measured at fair value. The amendments in this ASU are effective for the Company in fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. The Company is considering the impact of this pronouncement on the financial statements.
Management does not believe that there any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed financial statements.
Note 3 — Initial Public Offering
Pursuant to the IPO, the Company sold 20,000,000 Units, at a price of $10.00 per Unit. Each Unit consists of one Class A ordinary share, par value $0.0001 per share, and
one-third
of one redeemable warrant (each, a “Public Warrant” and collectively, the “Public Warrants”). Each whole Public Warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share.
 
11
TB SA ACQUISITION CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 
As of September
 
30
,
2022
and December 
31
,
2021
, the Class A ordinary shares reflected on the condensed balance sheets are reconciled in the following table:
 
Gross proceeds from IPO
    $ 200,000,000  
Less:
         
Proceeds allocated to Public Warrants
      (9,133,333 ) 
Proceeds allocated to derivative liability
      (10,676 ) 
Class A ordinary share issuance costs
      (4,538,588 ) 
Plus:
         
Remeasurement adjustment of carrying value to redemption value
      13,697,370  
    
 
 
  
Class A ordinary shares subject to possible redemption at December 31, 2021
   
 
200,014,773
 
    
 
 
  
Plus:
         
Remeasurement adjustment of carrying value to redemption value
      1,192,929  
    
 
 
  
Class A ordinary shares subject to possible redemption at September 30, 2022
   
$
201,207,702
 
    
 
 
  
 
12
TB SA ACQUISITION CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 
Note 4 — Related Party—Private Placement Warrants
Simultaneously with the closing of the IPO, the Sponsor purchased an aggregate of 
4,333,334
 Private Placement Warrants at a price of $
1.50
 per warrant ($
6,500,001
 in the aggregate) (the “Private Placement”). Each Private Placement Warrant is exercisable to purchase one Class A ordinary share at a price of $
11.50
per share. A portion of the purchase price of the Private Placement Warrants was added to the proceeds from the IPO to be held in the Trust Account.
The Private Placement Warrants will be identical to Public Warrants except that the Private Placement Warrants, so long as they are held by the Sponsor or its permitted transferees, (i) will not be redeemable by the Company, (ii) may not (including the Class A ordinary shares issuable upon exercise of these Private Placement Warrants), subject to certain limited exceptions, be transferred, assigned or sold by the holders until 30 days after the completion of the Company’s initial Business Combination, (iii) may be exercised by the holders on a cashless basis and (iv) (including the ordinary shares issuable upon exercise of these Warrants) will be entitled to certain registration rights.
If the Private Placement Warrants are held by holders other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by the holders on the same basis as the Public Warrants.
The Sponsor, officers and directors entered into a letter agreement with the Company, pursuant to which they agreed to waive their redemption rights with respect to any Founder Shares (as described in Note 5) and public shares held by them in connection with the completion of the initial Business Combination or certain amendments to the amended and restated memorandum and articles of association. In addition, the Sponsor, officers and directors agreed to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if the Company fails to complete the initial Business Combination within the prescribed time frame. However, if the Sponsor or any of the Company’s officers, directors or affiliates acquire public shares, they will be entitled to liquidating distributions from the Trust Account with respect to such public shares if the Company fails to complete the initial Business Combination within the prescribed time frame. In the event that the Company submits the initial Business Combination to the public shareholders for a vote, the Sponsor will agree to vote any Founder Shares held by it and any public shares purchased during or after the IPO in favor of the initial Business Combination and the officers and directors will also agree to vote any public shares purchased during or after the IPO in favor of the initial Business Combination.
Note 5 — Related Party Transactions
Founder Shares
On February 1, 2021, the Sponsor paid $25,000, or approximately $0.003 per share, to cover certain offering costs of the Company in consideration for 7,187,500 Class B ordinary shares, par value $0.0001 per share (the “Founder Shares”). On March 22, 2021, we effected a share surrender resulting in our initial shareholders holding 5,750,000 Class B ordinary shares. On May 7, 2021, the underwriter of the IPO’s over-allotment option expired unexercised, resulting in the forfeiture of an additional 750,000 Founder Shares.
The initial shareholders, officers and directors have agreed not to transfer or sell any of their Founder Shares until the earlier to occur of: (a) one year after the completion of the Company’s initial Business Combination and (b) subsequent to the Company’s initial Business Combination, (x) if the closing price of the Company’s Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within
any 30-trading
day period commencing at least 150 days after the Company’s initial Business Combination or (y) the date on which the Company completes a liquidation, merger, share exchange or other similar transaction that results in all of the Company’s public shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property. The Private Placement Warrants and the respective Class A ordinary shares underlying such Warrants are not transferable or salable until 30 days after the completion of the Company’s initial Business Combination. The foregoing restrictions will not be applicable to transfers (a) to the Company’s officers or directors, any affiliates or family members of any of the Company’s officers or directors, any members or partners of the Sponsor or their affiliates, any affiliates of the Sponsor, or any employees of such affiliates; (b) in the case of an individual, by gift to a member of one of the individual’s immediate family or to a trust, the beneficiary of which is a member of the individual’s immediate family, an affiliate of such person or to a charitable organization; (c) in the case of an individual, by virtue of laws of descent and distribution upon death of the individual; (d) in the case of an individual, pursuant to a qualified domestic relations order; (e) by private sales or transfers made in connection with any forward purchase agreement or similar arrangement or in connection with the consummation of a Business Combination at prices no greater than the price at which the Founder Shares, Private Placement Warrants or Class A ordinary shares, as applicable, were originally purchased; (f) by virtue of the Sponsor’s organizational documents upon liquidation or dissolution of the Sponsor; (g) to the Company for no value for cancellation in connection with the consummation of the Company’s initial Business Combination; (h) in the event of the Company’s liquidation prior to the completion of the Company’s initial Business Combination; or (i) in the event of the Company’s completion of a liquidation, merger, share exchange or other similar transaction which results in all of the Company’s public shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property subsequent to the Company’s completion of the Company’s initial Business Combination; provided, however, that in the case of clauses (a) through (f) these permitted transferees must enter into a written agreement agreeing to be bound by these transfer restrictions and the other restrictions contained in the letter agreement.
 
13
TB SA ACQUISITION CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 
On
March 12, 2021, the Company’s Sponsor transferred a total of 195,000 shares of Class B ordinary shares of the Company to various individuals at a price of $0.0035 per share. Gareth Penny received 100,000 shares, James Crawley received 35,000, Thando Mhlambiso received 30,000, and Ziyanda Ntshona received 30,000 shares, for a total of 195,000 Class B ordinary shares. Within each agreement that was executed with each individual, vesting provisions were defined for the transferred shares. Summarized, the provisions provided on the date of the Company’s IPO, twenty-five percent of the total transferred shares would vest, with an additional twenty-five percent vesting one year after the Company’s IPO date or on March 22, 2022. The final fifty percent vests on the date the Company consummates its business combination.
On June 30, 2022, the Company’s Sponsor transferred a total of 75,000 shares of Class B ordinary shares of the Company to Ofentse Molefe, the Company’s appointed Vice President of Business Development. The executed agreement with Ofentse Molefe provided a vesting schedule specifying that 4,167 shares will vest per month beginning on June 1, 2021 and fully vesting 18 months from the beginning date. The amount of vested shares shall not exceed 75,000 shares. As of September 30, 2022, 16 months have elapsed since the beginning of the vesting period.
The transfer of the Class B Ordinary shares is in the scope of FASB ASC Topic 718, “Compensation-Stock Compensation” (“ASC 718”). Under ASC 718, stock-based compensation associated with equity-classified awards is measured at fair value upon the grant date. The Founders Shares were granted subject to a performance condition (i.e., the occurrence of an Initial Public Offering and/or Business Combination). Compensation expense related to the Founders Shares is recognized only when the performance condition is probable of occurrence under the applicable accounting literature in this circumstance. See Note 9 for the Company’s vesting schedule and accounting treatment over the transferred Class B ordinary shares under ASC 718.
Consulting Arrangements
On March 15, 2021, the Company engaged James Crawley as Chief Financial Officer of the Company to perform executive services. As part of the agreement, James Crawley is to receive $2,000 on a weekly basis or approximately $8,667 per month beginning on March 1, 2021. As of September 30, 2022 and December 31, 2021, the Company has incurred and paid $78,216 and $86,670, respectively, related to services rendered by James Crawley.
On April 26, 2021, the Company engaged Ofentse Molefe as a consultant to render services to the Company. As part of the agreement, Ofentse Molefe is to receive $140,000 annually beginning on June 1, 2021, which is to be paid out on a monthly basis at $11,667 per month. As of September 30, 2022 and December 31, 2021, the Company has incurred and paid $105,000 and $81,667, respectively, related to services rendered by Ofentse Molefe.
Promissory Note—Related Party
On February 1, 2021, the Company issued a promissory note (the “Note”) to the Sponsor, pursuant to which the Company may borrow up to an aggregate principal amount of $300,000. The Note is
non-interest
bearing and payable on the earlier of (i) December 31, 2021, or (ii) the IPO. As of the consummation of the IPO on March 25, 2021, the Company had borrowed $133,541 under the Note. On April 16, 2021, the Company repaid the Note in full.
Due to Related Party
The Sponsor and an affiliate of the Sponsor have charged the Company for support charges under the administrative support agreement and other reimbursable expenses incurred in connection the Company’s operations. As of September 30, 2022 and December 31, 2021, the Company owed the Sponsor an aggregate of $378,987 and $243,038, respectively, of which mainly consist of admin support service fees and Tower Brook personnel expenses.
Administrative Support Agreement
Commencing on the date of the IPO, the Company has agreed to pay the Sponsor a total of $10,000 per month for office space and administrative support services. Upon completion of the Initial Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees. For the three and nine months ended September 30, 2022, the Company incurred $30,000 and $90,000 of administrative support services, respectively, of which $36,983 is included in due to related party in the accompanying condensed balance sheet as of September 30, 2022. For the three months ended September 30, 2021, and the period from January 27, 2021 (inception) to September 30, 2021, the Company incurred $30,000 and $62,000 of administrative support expense, respectively.
Working Capital Loans
In addition, in order to finance transaction costs in connection with a Business Combination, the initial shareholders or an affiliate of the initial shareholders or certain of the Company’s directors and officers may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company will repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of the proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible into warrants of the post-Business Combination entity at a price of $1.50 per warrant. The warrants would be identical to the Private Placement Warrants. On February 28, 2022, the Company issued a Working Capital Loan to the Sponsor, pursuant to which the Company may borrow up to an aggregate principal amount of $275,000 for working capital and other general corporate purposes. The loan is
non-interest
bearing and payable on June 30, 2023. At the option of the Sponsor, the outstanding principle of the loan may be converted into warrants (“Conversion Warrants”) equal to the outstanding principle of the loan divided by $1.50. On June 9, 2022, the Company issued a Working Capital Loan to the Sponsor, pursuant to which the Company may borrow up to an aggregate principal amount of $300,000 for working capital and other general corporate purposes. The loan is
non-interest
bearing and payable on June 30, 2023. At the option of the Sponsor, the outstanding principle of the loan may be converted into warrants (“Conversion Warrants”) equal to the outstanding principle of the loan divided by $1.50. As of September 30, 2022, $575,000 was drawn on the loan, presented at its fair value of $518,000 on the accompanying condensed balance sheet. As of December 31, 2021, the Company had no Working Capital Loan borrowings.
 
14
TB SA ACQUISITION CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 
Note 6 — Commitments & Contingencies
Registration Rights
The holders of the Founder Shares, Private Placement Warrants and any Warrants that may be issued on conversion of Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants or Warrants issued upon conversion of the Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights pursuant to a registration rights agreement to be signed prior to or on the Effective Date requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to the Class A ordinary shares). The holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that the Company registers such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of the initial Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting and Marketing Agreement
The Company has granted
the underwriter a 45-day
option from March 25, 2021, to purchase up to an additional 3,000,000 Units to cover over-allotments. On May 7, 2021, the underwriter’s over-allotment option expired unexercised.
On March 25, 2021, the Company paid a fixed underwriting discount of $0.20 per Unit, or $4,000,000 in the aggregate. Additionally, the underwriter and Tower Brook Financial, L.P. will assist the Company in holding meetings with its shareholders to discuss the potential Business Combination and the target business’ attributes, introduce the Company to potential investors that are interested in purchasing the Company’s securities in connection with a Business Combination, assist the Company in obtaining shareholder approval for the Business Combination and assist the Company with its press releases and public filings in connection with the Business Combination, for which they will be entitled to a deferred marketing fee of 3.5% ($7,000,000) of the gross proceeds of the IPO upon the completion of the Company’s initial Business Combination.
Note 7 — Shareholders’ Deficit
Preference Shares
— The Company is authorized to issue a total of 5,000,000 preference shares at par value of $0.0001 each. At September 30, 2022 and December 31, 2021, there were no preference shares issued or outstanding.
Class
 A Ordinary Shares
— The Company is authorized to issue a total of 500,000,000 Class A ordinary shares at par value of $0.0001 each. At September 30, 2022 and December 31, 2021, there were no Class A ordinary shares issued or outstanding, excluding 20,000,000 shares subject to possible redemption.
Class
 B Ordinary Shares
— The Company is authorized to issue a total of 50,000,000 Class B ordinary shares at par value of $0.0001 each. At September 30, 2022 and December 31, 2021, there were 5,000,000 Class B ordinary shares issued or outstanding.
Ordinary shareholders of record are entitled to one vote for each share held on all matters to be voted on by shareholders. Except as described below, holders of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class on all matters submitted to a vote of the Company’s shareholders except as required by law. Unless specified in the Company’s amended and restated memorandum and articles of association, or as required by applicable provisions of the Companies Act (As Revised) of the Cayman Islands or applicable stock exchange rules, the affirmative vote of a simple majority of the Company’s ordinary shares that are voted is required to approve any such matter voted on by the Company’s shareholders. Approval of certain actions will require a special resolution under Cayman Islands law, and pursuant to the Company’s amended and restated memorandum and articles of association; such actions include amending the Company’s amended and restated memorandum and articles of association and approving a statutory merger or consolidation with another company. The Company’s board of directors is divided into three classes, each of which will generally serve for a term of three years with only one class of directors being elected in each year. There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the shares voted for the election of directors can elect all of the directors. The Company’s shareholders are entitled to receive ratable dividends when, as and if declared by the board of directors out of funds legally available therefor. Prior to the Company’s initial Business Combination, only holders of the Company’s Founder Shares will have the right to vote on the election of directors. Holders of the Company’s public shares will not be entitled to vote on the election of directors during such time. In addition, prior to the completion of an initial Business Combination, holders of the Company’s Founder Shares may by ordinary resolution remove a member of the board of directors for any reason. The provisions of the Company’s amended and restated memorandum and articles of association governing the appointment or removal of directors prior to the Company’s initial Business Combination may only be amended by a special resolution passed by not less
than two-thirds
of the Company’s ordinary shares who attend and vote at the Company’s shareholder meeting which shall include the affirmative vote of a simple majority of the Company’s Class B ordinary
shares.
 
15

TB SA ACQUISITION CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 
Note 8 — Warrants
Each whole Warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment as discussed herein. In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of the initial Business Combination at an issue price or effective issue price of less than $9.20 per ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than
 
60
% of the total equity proceeds, and interest thereon, available for the funding of the initial Business Combination on the date of the consummation of the initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Class A ordinary shares during the 
20
 trading day period starting on the trading day prior to the day on which the Company consummates the initial Business Combination (such price, the “Market Value”) is below $
9.20
 per share, the exercise price of the Warrants will be adjusted (to the nearest cent) to be equal to 
115
% of the higher of the Market Value and the Newly Issued Price, the $
18.00
 per share redemption trigger price described below under “—Redemption of Warrants when the price per Class A ordinary share equals or exceeds $
18.00
” and “—Redemption of Warrants when the price per Class A ordinary shares equals or exceeds $
10.00
” will be adjusted (to the nearest cent) to be equal to 
180
% of the higher of the Market Value and the Newly Issued Price, and the $
10.00
 per share redemption trigger price described below under “—Redemption of Warrants when the price per Class A ordinary share equals or exceeds $
10.00
” will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.
The Warrants will become exercisable on the later of 12 months from the closing of the IPO or 30 days after the completion of its initial Business Combination and will expire five years after the completion of the Company’s initial Business Combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.
The Company has agreed that as soon as practicable, but in no event later than 20 business days after the closing of the initial Business Combination, the Company will use its commercially reasonable efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the Class A ordinary shares issuable upon exercise of the Warrants, and the Company will use its commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of the initial Business Combination, and to maintain the effectiveness of such registration statement and a current prospectus relating to those Class A ordinary shares until the Warrants expire or are redeemed, as specified in the warrant agreement; provided that if the Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their Warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, but the Company will use its commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. If a registration statement covering the Class A ordinary shares issuable upon exercise of the Warrants is not effective by the 60th day after the closing of the initial Business Combination, Warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise Warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption, but the Company will use its commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. In such event, each holder would pay the exercise price by surrendering the Warrants for that number of Class A ordinary shares equal to the lesser of (A) the quotient obtained by dividing (x) the product of the number of Class A ordinary shares underlying the Warrants, multiplied by the excess of the “fair market value” (as defined below) less the exercise price of the Warrants by (y) the fair market value and (B) 0.361. The “fair market value” shall mean the volume weighted average price of the Class A ordinary shares for the 10 trading days ending on the trading day prior to the date on which the notice of exercise is received by the warrant agent.
Redemption of Warrants when the price per Class
 A ordinary share equals or exceeds $18.00.
 Once the Warrants become exercisable, the Company may redeem the outstanding Warrants (except as described herein with respect to the Private Placement Warrants):
 
  •  
in whole and not in part;
 
  •  
at a price of $0.01 per warrant;
 
  •  
upon a minimum of 30 days’ prior written notice of redemption to each Warrant holder; and
 
  •  
if, and only if, the closing price of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a Warrant as described under the heading “Description of Securities—Warrants—Public Shareholders’ Warrants—Anti-Dilution Adjustments”) for any 20 trading days within a
30-trading
day period ending three trading days before the Company sends the notice of redemption to the Warrant holders.
The Company has established the last of the redemption criterion discussed above to prevent a redemption call unless there is at the time of the call a significant premium to the Warrant exercise price. If the foregoing conditions are satisfied and the Company issues a notice of redemption of the Warrants, each Warrant holder will be entitled to exercise his, her or its Warrant prior to the scheduled redemption date. However, the price of the Class A ordinary shares may fall below the $18.00 redemption trigger price (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a Warrant as described under the heading “Description of Securities—Warrants—Public Shareholders’ Warrants—Anti-dilution Adjustments”) as well as the $11.50 (for whole shares) Warrant exercise price after the redemption notice is issued.
 
16
TB SA ACQUISITION CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 
Redemption of Warrants when the price per Class
 A ordinary share equals or exceeds $10.00
. Once the Warrants become exercisable, the Company may redeem the outstanding Warrants:
 
  •  
in whole and not in part;
 
  •  
at $0.10 per Warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their Warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to the table sets forth ender “Description of Securities—Warrants—Public Shareholders’ Warrants” based on the redemption date and the “fair market value” of the Class A ordinary shares (as defined above) except as otherwise described below; and
 
  •  
if, and only if, the closing price of the Class A ordinary shares equals or exceeds $10.00 per public share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a Warrant as described under the heading “Description of Securities—Warrants—Public Shareholders’ Warrants—Anti-Dilution Adjustments”) for any 20 trading days within the
30-trading
day period ending three trading days before the Company sends the notice of redemption to the Warrant holders.
Note 9 — Share-Based Compensation
On March 12, 2021, the Company’s Sponsor transferred a total of 195,000 shares of Class B ordinary shares of the Company to individuals at a price of $0.0035 per share. Within each transfer agreement that was executed with each director, vesting provisions were defined for the transferred shares. Summarized, the provisions provided on the date of the Company’s IPO or March 12, 2021, twenty-five percent of the total transferred shares would vest, with an additional twenty-five percent vesting one year after the Company’s IPO date or March 12, 2022. The final fifty percent vests on the date the Company consummates its business combination.
The fair value of the Founder Shares on the grant date or March 12, 2021 was $5.48 per share, by applying a discount based upon a) the probability of a successful business combination and b) the lack of marketability of the Founder Shares. The aggregate grant date fair value of the award amounted to $1,068,600, of which $267,150 was recorded as stock compensation expense during the period from January 27, 2021 (inception) through December 31, 2021 and $486,501 was recorded during the nine months ended September 30, 2022, respectively, which represent the vesting of fifty percent of the transferred shares in total.
A summary of the restricted share award and restricted unit activity of the Founder Shares transferred on March 12, 2021 for period from January 27, 2021 (inception) through December 31, 2021 and for the nine months ended September 30, 2022 is as follows:
 
    
Number of

Shares
  
Granted on March 12, 2021
      195,000  
Forfeited
      —    
Vested
      (48,750 ) 
    
 
 
  
Unvested Outstanding at December 31, 2021
   
 
146,250
 
Vested
      (48,750 ) 
    
 
 
  
Unvested Outstanding at September 30, 2022
   
 
97,500
 
    
 
 
  
A summary vesting schedule for the Company’s transferred founder’s shares can be seen below:
 
    
Amount

Vested
  
Amount vested on March 22, 2021, the Company’s IPO date (represents 25% of shares vested or 48,750 shares)
    $ 267,150  
Amount vested on March 22, 2022, one year from the Company’s IPO date (represents 25% of shares vested or 48,750 shares)
      267,150  
Amount to be vested upon the Company’s consummation of a successful business combination (represents 50% of shares vested or 97,500 shares)
      534,300  
    
 
 
  
Total vesting amount
   
$
1,068,600
 
    
 
 
  
 
 
17
TB SA ACQUISITION CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 
On June
 
30
,
2022
, the Company’s Sponsor transferred a total of
75,000
shares of Class B ordinary shares of the Company to Ofentse Molefe, the Company’s appointed Vice President of Business Development. The executed agreement with Ofentse Molefe provided a vesting schedule specifying that
4,167
shares will vest per month beginning on June 
1
,
2021
and fully vesting
18
months from the beginning date. The amount of vested shares shall not exceed
75,000
shares.
The fair value of the Founder Shares on the grant date of June 30, 2022 was $3.29 per share, by applying a discount based upon a) the probability of a successful business combination and b) the lack of marketability of the Founder Shares. The aggregate grant date fair value of the award amounted to $246,750, of which no amount was recorded as stock compensation expense during the period from January 27, 2021 (inception) through December 31, 2021 and $219,351 was recorded during the nine months ended September 30, 2022, which represent the vesting of 66,672 shares over the course of 16 elapsed months since the beginning of the vesting period.
A summary of the restricted share award and restricted unit activity of the Founder Shares transferred on September 30, 2022 for the nine months ended September 30, 2022 is as follows:
 
    
Number of

Shares
  
Granted on June 30, 2022
      75,000  
Forfeited
      —    
Vested
      (66,672 ) 
    
 
 
  
Unvested Outstanding at September 30, 2022
   
 
8,328
 
    
 
 
  
A summary vesting schedule for the Company’s transferred founder’s shares can be seen below:
 
    
Amount

Vested
  
Amount vested retrospectively from June 1, 2021 through June 30, 2022

    $ 178,223  
Amount vested from July 1, 2022 through September 30, 2022
 
 
41,128
 
Amount to be vested upon the Company’s consummation of a successful business combination or November 30, 2022 (represents five additional months of vesting)
      27,399  
    
 
 
  
Total vesting amount
   
$
246,750
 
  
 
 
 
Total unrecognized compensation expense related to unvested Founder Shares at September 30, 2022 amounted to $561,699 and is expected to be recognized once defined intervals within the executed transfer agreements are met, such as the consummation of a business combination.
Note 10 — Fair Value Measurements
Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
 
  •  
Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;
 
  •  
Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
 
  •  
Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
 
18
TB SA ACQUISITION CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 
The following table presents information about the Company’s assets that are measured at fair value on a recurring basis at September 30, 2022 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
 
    
September 30, 2022
     
Quoted

Prices In

Active Markets

(Level 1)
     
Significant

Other

Observable

Inputs

(Level 2)
     
Significant

Other

Unobservable

Inputs

(Level 3)
  
Description
                                    
Marketable securities held in Trust Account
    $ 201,207,702      $ 201,207,702        —          —    
    
 
 
     
 
 
     
 
 
     
 
 
  
Liabilities:
                                    
Working capital loan—related party
      518,000        —          —          518,000  
Warrant liabilities—Public
      333,333        333,333        —          —    
Warrant liabilities—Private
      216,667        —          —          216,667  
    
 
 
     
 
 
     
 
 
     
 
 
  
    
$
550,000
 
   
$
333,333
 
   
$
—  
     
$
216,667
 
    
 
 
     
 
 
     
 
 
     
 
 
  
The following table presents information about the Company’s assets that are measured at fair value on a recurring basis at December 31, 2021 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
 
    
December 31,

2021
     
Quoted

Prices In

Active Markets

(Level 1)
     
Significant

Other

Observable

Inputs

(Level 2)
     
Significant

Other

Unobservable

Inputs

(Level 3)
  
Description
                                    
Marketable securities held in Trust Account
    $ 200,014,773      $ 200,014,773        —          —    
    
 
 
     
 
 
     
 
 
     
 
 
  
Liabilities:
                                    
Warrant liabilities—Public
      3,400,000        3,400,000        —          —    
Warrant liabilities—Private
      2,210,000        —          —          2,210,000  
    
 
 
     
 
 
     
 
 
     
 
 
  
    
$
5,610,000
 
   
$
3,400,000
 
   
$
—  
     
$
2,210,000
 
    
 
 
     
 
 
     
 
 
     
 
 
  
 
19
TB SA ACQUISITION CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 
Warrants and Working Capital Loan
The Warrants and loan are accounted for as liabilities in accordance with ASC
815-40
on the Condensed Balance Sheets. The warrant liabilities and loan are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities and loan in the statements of operations.
Measurement
Warrants
The Company utilized a Monte Carlo simulation model to value the Warrants at the initial measurement date and, for the Private Placement Warrants, at each subsequent reporting period, with changes in fair value recognized in the statement of operations. The estimated fair value of the warrant liability is determined using Level 3 inputs. Inherent in a binomial options pricing model are assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its ordinary shares based on historical volatility of comparable SPAC warrants that matches the expected remaining life of the Warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the Warrants. The expected life of the Warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates to remain at zero.
The aforementioned warrant liabilities are not subject to qualified hedge accounting.
The following table provides quantitative information regarding Level 3 warrants fair value measurements:
 
    
At

September 30, 2022
    
At

December 31, 2021
  
Share price
    $ 10.00     $ 10.00  
Strike price
    $ 11.50     $ 11.50  
Term (in years)
      5.00       5.00  
Volatility
      1.0 %      10.0 % 
Risk-free rate
      3.97 %      1.47 % 
Dividend yield
      0.0 %      0.0 % 
The following table presents the changes in the fair value of warrants liabilities:
 
    
Private

Warrants

(Level 3)
     
Public

Warrants

(Level 1)
     
Warrant

Liabilities
  
Fair value as of December 31, 2021
   
$
2,210,000
 
   
$
3,400,000
 
   
$
5,610,000
 
Change in fair value
      (1,170,000 )       (1,800,000 )       (2,970,000 ) 
    
 
 
     
 
 
     
 
 
  
Fair value as of March 31, 2022
   
 
1,040,000
 
   
 
1,600,000
 
   
 
2,640,000
 
Change in fair value
      (520,000 )       (866,667 )       (1,386,667 ) 
    
 
 
     
 
 
     
 
 
  
Fair value as of June 30, 2022
   
 
520,000
 
   
 
733,333
 
   
 
1,253,333
 
Change in fair value
      (303,333 )       (400,000 )       (703,333 )
    
 
 
     
 
 
     
 
 
  
Fair value as of September 30, 2022
   
$
216,667
 
   
$
333,333
 
   
$
550,000
 
    
 
 
     
 
 
     
 
 
  
Transfers to/from Levels 1, 2 and 3 are recognized at the end of the reporting period in which a change in valuation technique or methodology occurs. There were transfers out of Level 3 into Level 1 of $9,133,333 in the fair value hierarchy for the year ended December 31, 2021 for the Public Warrants. As of September 30, 2022 and December 31, 2021, the Company utilized the quoted market price for the fair value of the Public
Warrants. There were no transfers during the three and nine months ended September 30, 2022.
Working Capital Loan
On February 28, 2022, June 9, 2022, and September 30, 2022, the Company used a
yield-to-maturity
bond pricing model to value the loan. The loan is classified within Level 3 of the fair value hierarchy at the measurement date due to the use of unobservable inputs.
The key inputs into the pricing model for the loan was as follows:
 
    
At

September 30, 2022
    
At

June 9, 2022
    
At

February 28, 2022
  
Term (years)
      0.75       1.06       1.33  
Selected Debt Yield Rate (B and BB rated bond yields)
      15.0 %      8.0 %      6.0 % 
Stock price
    $ 9.90     $ 9.73     $ 9.73  
Strike price
    $ 11.50     $ 11.50     $ 11.50  
Volatility
      1.00 %      5.10 %      6.81 % 
Risk-free rate
      4.04 %      3.07 %      1.76 % 
Dividend yield
      0.0 %      0.0 %