The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited financial statements and the notes related thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under "Cautionary Note Regarding Forward-Looking Statements and Risk Factor Summary," "Item 1A. Risk Factors" and elsewhere in this report.

Overview

We are a blank check company incorporated on June 1, 2021 as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer to in this report as our initial business combination. While we may pursue an initial business combination target in any industry or geographical location, we intend to focus our search on a target business operating in the software and technology-enabled services industry with a total enterprise value in excess of $1 billion.



On September 27, 2021, the registration statement on Form
S-1
(File
No. 333-259470)
relating to our initial public offering was declared effective by the SEC. On
September 30, 2021, we consummated our initial public offering of 25,000,000
units, with each unit consisting of one share of Class A common stock and
one-half
of one redeemable warrant, each whole warrant entitling the holder thereof to
purchase one share of Class A common stock at an exercise price of $11.50 per
share, subject to adjustment. The units were sold at an offering price of $10.00
per unit, generating total gross proceeds of $250,000,000.

Simultaneously with the consummation of our initial public offering, we consummated the private placement of 7,000,000 private placement warrants to our sponsor at a price of $1.00 per private placement warrant, generating total proceeds of $7,000,000.

On October 22, 2021, the underwriters partially exercised their over-allotment option and purchased 2,510,000 additional units at $10.00 per unit, generating additional gross proceeds of $25,100,000. In addition, October 22, 2021, simultaneously with the partial exercise of the over-allotment option by the underwriters, the sponsor purchased an additional 502,000 private placement warrants at $1.00 per private placement warrant, generating additional gross proceeds of $502,000.

A total of $275,100,000 (or $10.00 per unit sold in our initial public offering) of the net proceeds from our initial public offering (including the partial exercise of the underwriter's over-allotment option) and the private placement was placed in the trust account, with Continental Stock Transfer & Trust Company acting as trustee, and has been invested only in U.S. "government securities" within the meaning of Section 2(a)(16) of the Investment Company Act, having a maturity of 185 days or less, or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. Except with respect to interest earned on the funds held in the trust account that may be released to us to pay our tax obligations, the funds held in the trust account will not be released from the trust account until the earliest of: (i) the completion of our initial business combination, (ii) the redemption of any public shares properly tendered in connection with a stockholder vote to amend our amended and restated certificate of incorporation (a) to modify the substance or timing of our obligation to allow redemptions in connection with our initial business combination or to redeem or to redeem 100% of our public shares if we do not complete our initial business combination by March 30, 2023 or (b) with respect to any other provision relating to stockholders' rights or pre-initial business combination activity, and (iii) the redemption of our public shares if we do not complete our initial business combination by March 30, 2023, subject to applicable law.

Our units began trading on September 28, 2021 on the NYSE under the symbol "BACA.U." Commencing on November 18, 2021, the Class A common stock and warrants comprising the units began separate trading on the NYSE under the symbols "BACA" and "BACA WS," respectively. Those units not separated continue to trade on the NYSE under the symbol "BACA.U."


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We intend to effectuate our initial business combination using cash from the proceeds of our initial public offering and the private placement, our capital stock, debt or a combination of cash, stock and debt. We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete our initial business combination will be successful.

Results of Operations



We have neither engaged in any operations nor generated any revenues to date.
Our only activities from June 1, 2021 (inception) through December 31, 2021 were
organizational activities and those necessary to prepare for our initial public
offering, and since our initial public offering, our activity has been limited
to identifying a target company for a business combination. We do not expect to
generate any operating revenues until after the completion of our initial
business combination. We generate
non-operating
income in the form of interest income on marketable securities held in the trust
account. We incur expenses as a result of being a public company (for legal,
financial reporting, accounting and auditing compliance), as well as for due
diligence expenses in connection with searching for, and completing, a business
combination.

For the period from June 1, 2021 (inception) through December 31, 2021, we had net income of $8,323,175, which consists of operating costs of $(392,746), offset by interest earned on marketable securities held in the trust account of $5,128 and offering costs associated with derivative warrant liabilities of $(1,780,157) and change in fair value of derivative warrant liabilities of $10,490,950.

Liquidity and Capital Resources

As of December 31, 2021, we had cash of $670,762. Until the consummation of our initial public offering, our only source of liquidity was an initial purchase of founder shares by our sponsor and loans from our sponsor.

On September 30, 2021, we consummated our initial public offering of 25,000,000 units, at $10.00 per unit, generating gross proceeds of $250,000,000. Simultaneously with the closing of our initial public offering, we consummated the private placement of 7,000,000 private placement warrants to our sponsor at a price of $1.00 per private placement warrant, generating gross proceeds of $7,000,000.

Following our initial public offering (including the partial exercise of the over-allotment option), and the sale of the private placement warrants, a total of $275,100,000 was placed in the trust account. We incurred $15,636,971 in transaction costs, including $5,502,000 of underwriting commissions, $9,628,500 of deferred underwriting commissions and $506,471 of other costs.

For the period from June 1, 2021 (inception) through December 31, 2021, cash used in operating activities was $847,766. Net income of $8,323,175 was affected by interest earned on marketable securities held in the trust account of $(5,128), offering costs associated with derivative warrant liabilities of $1,780,157 and change in fair value of derivative warrant liabilities of $(10,490,950) and changes in operating assets and liabilities, which used $(455,020) of cash from operating activities.

As of December 31, 2021, we had cash and marketable securities held in the trust account of $275,775,890. We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account (less deferred underwriting commissions and income taxes payable), to complete our initial business combination. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

As of December 31, 2021, we had cash of $670,762 outside of the trust account. We intend to use the funds held outside of the trust account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a business combination.

In order to fund working capital deficiencies or finance transaction costs in connection with an initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors will loan us funds as may be required. If we complete our initial business combination, we expect to repay such loaned amounts out of the proceeds of the trust account released to us. Otherwise, such loans may be repaid only out of funds held outside the trust account. Up to $1,500,000 of such loans may be convertible into warrants at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants issued to our sponsor.

We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial business combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial business combination. Moreover, we may need to obtain additional financing either to complete our initial business combination or because we become obligated to redeem a significant number of our public shares upon consummation of our initial business combination, in which case we may issue additional securities or incur debt in connection with such business combination.


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Management continues to evaluate the impact of the COVID-19 pandemic and has
concluded that while it is reasonably possible that the virus could have a
negative effect on our financial position, results of its operations and/or our
ability to consummate an initial business combination, the specific impact is
not readily determinable as of the date of the financial statements. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty. Our ability to consummate an initial business
combination may also be dependent on raising additional equity and debt
financing, which may be impacted by the
COVID-19
pandemic and resulting market volatility. The impact of the
COVID-19
pandemic on our results of operations, financial position and cash flows will
depend on future developments, including the continued duration and spread of
the pandemic and related advisories and restrictions, which are highly uncertain

and cannot be predicted.

Off-Balance
Sheet Arrangements

We did not have any
off-balance
sheet arrangements as of December 31, 2021.

Contractual Obligations

We do not have any long-term debt obligations, capital lease obligations, operating lease obligations, purchase obligations or long-term liabilities, other than an agreement to pay our sponsor a monthly fee of $10,000 for office space, secretarial and administrative support. We began incurring these fees on September 28, 2021 and will continue to incur these fees monthly until the earlier of the completion of our initial business combination and our liquidation.

The underwriters of our initial public offering are entitled to a deferred underwriting commission of $0.35 per unit, or $9,628,500 in the aggregate. Subject to the terms of the underwriting agreement, (i) the deferred underwriting commission was placed in the trust account and will be released to the underwriters only upon the completion of our initial business combination and (ii) the deferred underwriting commission will be waived by the underwriters in the event that we do not complete our initial business combination.

Critical Accounting Policies

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies:

Common Stock Subject to Possible Redemption



We account for our shares of common stock subject to possible redemption in
accordance with ASC Topic 480 "Distinguishing Liabilities from Equity." 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 our control require common stock subject
to redemption to be classified outside of permanent equity. Ordinary liquidation
events, which involve the redemption and liquidation of all of the entity's
equity instruments, are excluded from the provisions of ASC 480.

All of our shares of Class A common stock sold as part of the units in our
initial public offering contain a redemption feature which allows for the
redemption of such public shares in connection with our liquidation if there is
a stockholder vote or tender offer in connection with a business combination and
in connection with certain amendments to our amended and restated certificate of
incorporation. We recognize changes in redemption value immediately as they
occur and adjust the carrying value of redeemable shares of common stock to
equal the redemption value at the end of each reporting period. Increases or
decreases in the carrying amount of redeemable shares of common stock are
affected by charges against additional
paid-in
capital and accumulated deficit.

Net Income (Loss) per Share of Common Stock



We apply the
two-class
method in calculating net loss per share of common stock. The contractual
formula utilized to calculate the redemption amount approximates fair value. The
class feature to redeem at fair value means that there is effectively only one
class of stock. Changes in fair value are not considered a dividend for the
purposes of the numerator in the earnings per share calculation. Net loss per
share of common stock is computed by dividing the pro rata net loss between the
shares of Class A common stock and the shares of Class B common stock by the
weighted average number of shares common stock outstanding for each of the
periods. The calculation of diluted loss per share of common stock does not
consider the effect of the warrants and rights issued in connection with our
initial public offering since the exercise of the warrants and rights are
contingent upon the occurrence of future events and the inclusion of such
warrants would be anti-dilutive. The warrants are exercisable for 21,257,000
shares of Class A common stock in the aggregate.

Public Warrants and Private Placement Warrants

We account for the public warrants and the private placement warrants in accordance with ASC Topic 815-40, Derivatives and Hedging, Contracts in Entity's Own Equity, under which the warrants do not meet the criteria for equity classification and must be recorded as liabilities. As the warrants meet the definition of a derivative as contemplated in ASC 815, the warrants are measured at fair value at inception and at each reporting date in accordance with ASC 820, "Fair Value Measurement", with changes in fair value recognized in the statements of operations in the period of change. As of December 31, 2021, the estimated fair value of the public warrants was determined by their public trading price and the estimated fair value of the private placement warrants was determined using a modified Black-Scholes valuation model using Level 3 inputs such as exercise price, stock price, volatility, term, risk-free rate and dividend yield.


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Recent Accounting Standards



In August 2020, the Financial Accounting Standard Board's ("FASB") issued
Accounting Standards Update ("ASU")
No. 2020-06,
Debt-Debt with Conversion and Other Options (Subtopic
470-20)
and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic
815-40):
Accounting for Convertible Instruments and Contracts in an Entity's Own Equity
("ASU
2020-06"),
which simplifies accounting for convertible instruments by removing major
separation models required under current GAAP. ASU
2020-06
also removes certain settlement conditions that are required for equity-linked
contracts to qualify for the derivative scope exception, and it simplifies the
diluted earnings per share calculation in certain areas. We adopted ASU
2020-06
on June 1, 2021 (inception). Our adoption of ASU
2020-06
did not impact our financial position, results of operations or cash flows.

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

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