M3-BRIGADE ACQUISITION III CORP. The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with our audited financial statements and the notes related thereto which are included in "Item 8. Financial Statements and Supplementary Data" of this annual report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements. 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 "Special Note Regarding Forward-Looking Statements," "Item 1A. Risk Factors" and elsewhere in this annual report.
Overview
We are a blank check company formed under the laws of the
Recent Developments
Appointment of new members to Board of Directors
On
Business Combination Agreement
On
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Conditions to the Closing
The consummation of the Transactions is subject to the satisfaction or waiver of
certain customary closing conditions, among others (i) the approval of the
Transactions and related matters by the equity holders of MBSC and Greenfire,
(ii) the absence of any laws or injunctions prohibiting the Transactions, (iii)
the accuracy (subject to agreed materiality thresholds) of the parties'
representations and warranties contained in the Business Combination Agreement,
(iv) the absence of any "Material Adverse Effect" on either MBSC or Greenfire
(as defined in the Business Combination Agreement), (v) approval for listing of
the PubCo Common Shares by the
Termination
The Business Combination Agreement may be terminated at any time prior to the
Closing (a) by mutual written consent of MBSC and Greenfire, (b) by either MBSC
or Greenfire, if the approval of the equity holders of MBSC or Greenfire is not
obtained, (c) by either MBSC or Greenfire, if the other party has materially
breached its covenants or representations under the Business Combination
Agreement, (d) by either MBSC or Greenfire, if the Closing has not occurred on
or before
Subscription Agreements
On
Each of the
The foregoing description of the Greenfire Subscription Agreements does not
purport to be complete and is qualified in its entirety by reference to the full
text of the form of Subscription Agreement, a copy of which is included as
Exhibit 10.1 to the Current Report on Form 8-K filed with the
Greenfire Shareholder Support Agreement
On
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The foregoing description of the Greenfire Shareholder Support Agreement does
not purport to be complete and is qualified in its entirety by reference to the
full text of the form of Shareholder Support Agreement, a copy of which is
included as Exhibit 10.2 to the Current Report on Form 8-K filed with the
Sponsor Agreement
On
The foregoing description of the Sponsor Agreement does not purport to be
complete and is qualified in its entirety by reference to the full text of the
Sponsor Agreement, a copy of which is included as Exhibit 10.3 to the Current
Report on Form 8-K filed with the
Lock-Up Agreement
At the Closing,
Investor Rights Agreement
At the Closing,
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Investor Support Agreements
Concurrently with the execution of the Business Combination Agreement, MBSC
entered into Investor Support Agreements with holders of a majority of MBSC's
outstanding public SPAC Warrants, pursuant to which, among other things, such
warrant holders agreed to vote all of the SPAC Warrants currently held by them
in favor of any amendment to the terms of the SPAC Warrants solely to amend the
terms of the SPAC Warrants together with any amendments required to give effect
thereto such that all of the SPAC Warrants shall be exchanged for
Supplemental Warrant Agreement
In accordance with the terms of the Company Warrant Agreement, as amended by the Supplemental Warrant Agreement: (a) a certain number of Company Bond Warrants shall be deemed to be cancelled in exchange for a cash payment from Greenfire equal to the pro rata share of the Cash Consideration payable to holders of Company Bond Warrants as determined in accordance with the Supplemental Warrant Agreement; following which (b) each remaining Company Bond Warrant shall be deemed to be exercised for Greenfire Shares pursuant to the terms of the Company Warrant Agreement as amended by the Supplemental Warrant Agreement, and each former holder of Company Bond Warrants shall, following the Amalgamation, receive PubCo Common Shares as determined in accordance with the Supplemental Warrant Agreement.
The Business Combination Agreement, the form of Subscription Agreement, the Greenfire Shareholder Support Agreement, the Sponsor Agreement, the form of Investor Support Agreement and the Supplemental Warrant Agreement have been included to provide investors with information regarding their terms. They are not intended to provide any other factual information about MBSC, Greenfire or their respective affiliates. The representations, warranties, covenants and agreements contained in the Business Combination Agreement, the Subscription Agreements, the Greenfire Shareholder Support Agreement, the Sponsor Agreement, the Investor Support Agreements and the Supplemental Warrant Agreement and the other documents related thereto were made only for purposes of the Transactions as of the specific dates therein, were solely for the benefit of the parties to the Business Combination Agreement, the Subscription Agreements, the Greenfire Shareholder Support Agreement, the Sponsor Agreement, the Investor Support Agreements and the Supplemental Warrant Agreement, as applicable, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Business Combination Agreement, the Subscription Agreements, the Greenfire Shareholder Support Agreement, the Sponsor Agreement, the Investor Support Agreements and the Supplemental Warrant Agreement, as applicable, instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors are not third-party beneficiaries under the Business Combination Agreement, the Subscription Agreements, the Greenfire Shareholder Support Agreement, the Sponsor Agreement, the Investor Support Agreements and the Supplemental Warrant Agreement, as applicable, and should not rely on the representations, warranties, covenants and agreements or any descriptions thereof as characterizations of the actual state of facts or condition of the parties thereto or any of their respective affiliates. Moreover, information concerning the subject matter of representations and warranties may change after the date of the Business Combination Agreement, the Subscription Agreements, the Greenfire Shareholder Support Agreement, the Sponsor Agreement, the Investor Support Agreements and the Supplemental Warrant Agreement, as applicable, which subsequent information may or may not be fully reflected in MBSC's public disclosures.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date.
Our only activities from
For the year ended
For the period from
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Liquidity and Going Concern
On
Following the Initial Public Offering, the partial exercise of the
over-allotment option by the underwriters' and the sale of the Private Placement
Warrants, a total of
For the year ended
For the period from
As of
As of
In order to fund working capital deficiencies or finance transaction costs in
connection with a Business Combination, the sponsor, an affiliate of the
sponsor, or our officers and directors may, but are not obligated to, loan us
funds as may be required. If we complete a Business Combination, we would repay
such loaned amounts. In the event that a Business Combination does not close, we
may use a portion of the working capital held outside the trust account to repay
such loaned amounts but no proceeds from our trust account would be used for
such repayment. Up to
An affiliate of the sponsor paid
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Our assessment of going concern considerations was made in accordance with Accounting Standards Update ("ASU") 2014-15, "Disclosures of Uncertainties about an Entity's Ability to Continue as a Going Concern." We have incurred and expects to continue to incur significant costs in pursuit of its financing and acquisition plans. We expect that we will need to raise additional funds in order to meet the expenditures required for operating our business, pay our existing liabilities and pay for the costs of identifying a target business, undertaking in-depth due diligence and negotiating a Business Combination. Additionally, we may need to obtain additional financing either to complete our Business Combination or because we become obligated to redeem a significant number of our public shares upon consummation of our Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our Business Combination. If we are unable to complete our Business Combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. In addition, following our Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations. These conditions raise substantial doubt about our ability to continue as a going concern one year from the date of our financial statements are issued.
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities, which would be considered
off-balance sheet arrangements as of
Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities.
The underwriters are entitled to a deferred fee of
Critical Accounting Estimates
The preparation of financial statements and related disclosures in conformity
with accounting principles generally accepted in
Derivative Liabilities
Forward purchase agreement and subscription purchase agreement are accounted for
as liabilities in accordance with Accounting Standards Codification ("ASC")
Topic 815, "Derivatives and Hedging", and presented as derivative liabilities on
the
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The key inputs used for forward purchase agreement liability were as follow:
December 31, December 31,
2022 2021
Probability of business combination 90 % 100 %
Underlying common stock price $ 10.14 $ 9.87
Cash flow discount rate 3.99 % 0.08 %
Unit purchase price $ 10.00 $ 10.00
Estimated maturity date 06/20/2023 6/14/2022
Probability of forward purchase agreement being utilized 0 % 0 %
The key inputs used for subscription purchase agreement liability were as
follow:
December 14,
2022
(Initial December 31,
measurement) 2022
Probability of business combination 90 % 90 %
Underlying common stock price $ 10.10 $ 10.14
Cash flow discount rate 4.68 % 3.99 %
Unit purchase price $ 10.10 10.10
Estimated maturity date 06/20/2023 6/20/2023
Probability of subscription purchase agreement being utilized 0 % 0 %
Recent Accounting Standards
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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