Airship AI Holdings, Inc. 10-Q

Item 1. Financial Statements. BYTE ACQUISITION CORP. CONDENSED BALANCE SHEET SEPTEMBER 30, 2021 (Unaudited) Assets Current assets: Cash $ 1,727,804 Prepaid expenses 835,924 Total current assets 2,563,728 Investments held in Trust Account 323,709,480 Total Assets $ 326,273,208 Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit: Current liabilities: Accrued expenses $ 75,385 Total current liabilities 75,385 Deferred underwriting commissions 11,329,238 Derivative warrant liabilities 10,353,770 Total liabilities 21,758,393 Commitments and Contingencies Class A ordinary shares subject to possible redemption, $ 0.0001 par value; 32,369,251 shares 323,692,510 Shareholders’ Deficit: Preference shares, $ 0.0001 par value; 1,000,000 shares authorized; none issued and outstanding - Class A ordinary shares, $ 0.0001 par value; 200,000,000 shares authorized; 1,030,000 shares issued and outstanding (excluding 32,369,251 shares subject to possible redemption) 103 Class B ordinary shares, $ 0.0001 par value; 20,000,000 shares authorized; 8,092,313 shares issued and outstanding 809 Additional paid-in capital - Accumulated deficit ( 19,178,607 ) Total shareholders’ deficit ( 19,177,695 ) Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Stockholders’ Deficit: $ 326,273,208 The accompanying notes are an integral part of these unaudited condensed financial statements. 1 BYTE ACQUISITION CORP. CONDENSED STATEMENTS OF OPERATIONS (Unaudited) For the Three Months Ended September 30, 2021 For The Period From January 8, 2021 (inception) through September 30, 2021 General and administrative expenses $ 196,702 $ 613,851 General and administrative expenses - related party 30,000 70,000 Loss from operations ( 226,702 ) ( 683,851 ) Change in fair value of derivative warrant liabilities 10,019,770 5,363,330 Offering costs associated with derivative warrant liabilities - ( 845,080 ) Income from investments held in Trust Account 6,162 16,970 Net income $ 9,799,230 $ 3,851,369 Weighted average shares outstanding of Class A ordinary shares 32,369,251 23,230,667 Basic and diluted net income per share, Class A ordinary shares $ 0.24 $ 0.12 Weighted average shares outstanding of Class B ordinary shares 9,122,313 8,637,592 Basic and diluted net income per share, Class B ordinary shares $ 0.24 $ 0.12 The accompanying notes are an integral part of these unaudited condensed financial statements. 2 BYTE ACQUISITION CORP. STATEMENTS OF CHANGE IN SHAREHOLDERS’ EQUITY FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2021 AND FOR THE PERIOD FROM JANUARY 8, 2021 (INCEPTION) THROUGH SEPTEMBER 30, 2021 (Unaudited) Ordinary Shares Additional Total Class A Class B Paid-in Accumulated Shareholders’ Shares Amount Shares Amount Capital Deficit Equity Balance - January 8, 2021 (Inception) - $ - - $ - $ - $ - $ - Issuance of Class B ordinary shares to Sponsor (1) - - 8,625,000 863 24,137 - 25,000 Sale of private placement units, less fair value of derivative warrant liabilities 1,030,000 103 - - 9,800,347 - 9,800,450 Accretion of Class A ordinary shares subject to possible redemption amount - - - - ( 9,824,484 ) ( 23,030,030 ) ( 32,854,514 ) Net loss - - - - - ( 1,234,716 ) ( 1,234,716 ) Balance - March 31, 2021 (unaudited), as restated 1,030,000 $ 103 8,625,000 $ 863 $ - $ ( 24,264,746 ) $ ( 24,263,780 ) Forfeiture of Class B ordinary shares - - ( 532,687 ) ( 54 ) 54 - - Subsequent measurement of Class A ordinary shares subject to redemption against additional paid-in capital - - - - ( 54 ) 54 - Net loss - - - - - ( 4,713,145 ) ( 4,713,145 ) Balance - June 30, 2021 (unaudited), as restated 1,030,000 $ 103 8,092,313 $ 809 $ - $ ( 28,977,837 ) $ ( 28,976,925 ) Net income - - - - - 9,799,230 9,799,230 Balance - September 30, 2021 1,030,000 $ 103 8,092,313 $ 809 $ - $ ( 19,178,607 ) $ ( 19,177,695 ) The accompanying notes are an integral part of these unaudited financial statements. 3 BYTE ACQUISITION CORP. STATEMENT OF CASH FLOWS FOR THE PERIOD FROM JANUARY 8, 2021 (INCEPTION) THROUGH SEPTEMBER 30, 2021 (Unaudited) Cash Flows from Operating Activities: Net income $ 3,851,369 Adjustments to reconcile net income to net cash used in operating activities: General and adminsitrative expenses paid by related party in exchange for issuance of Class B ordinary shares 25,000 General and adminsitrative expenses paid by related party under promissory note 2,330 Change in fair value of derivative warrant liabilities ( 5,363,330 ) Offering costs associated with derivative warrant liabilities 845,080 Income from investments held in Trust Account ( 16,970 ) Changes in operating assets and liabilities: Prepaid expenses ( 835,924 ) Accrued expenses 5,385 Net cash used in operating activities ( 1,487,060 ) Cash Flows from Investing Activities: Cash deposited in Trust Account ( 323,692,510 ) Net cash used in investing activities ( 323,692,510 ) Cash Flows from Financing Activities: Repayment of note payable to related party ( 148,620 ) Proceeds received from initial public offering, gross 323,692,510 Proceeds received from private placement 10,300,000 Offering costs paid ( 6,936,516 ) Net cash provided by financing activities 326,907,374 Net change in cash 1,727,804 Cash - beginning of the period - Cash - end of the period $ 1,727,804 Supplemental disclosure of noncash investing and financing activities: Offering costs included in accrued expenses $ 70,000 Offering costs paid by related party under promissory note $ 146,289 Deferred underwriting commissions $ 11,329,238 The accompanying notes are an integral part of these unaudited financial statements. 4 BYTE ACQUISITION CORP. NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS Note 1 - Description of Organization and Business Operations BYTE Acquisition Corp. (the “Company”) is a blank check company incorporated as a Cayman Islands exempted company on January 8, 2021. The Company was formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (“Business Combination”). While the Company may pursue an initial business combination target in any business or industry, it intends to focus its search for targets in the Israeli technology industry, including those engaged in cybersecurity, automotive technology, fintech, enterprise software, cloud computing, semiconductors, medical technology, AI and robotics and that offer a differentiated technology platform and products. 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. As of September 30, 2021, the Company had not yet commenced operations. All activity for the period from January 8, 2021 (inception) through September 30, 2021 relates to the Company’s formation and the initial public offering (the “Initial Public Offering”) and since the closing of the initial public offering, the search for a prospective initial Business Combination. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company generates non-operating income in the form of interest and other income on investments of the proceeds derived from the Initial Public Offering. The Company has selected December 31 as its fiscal year end. The Company’s sponsor is Byte Holdings LP, a Cayman Islands exempted limited partnership (the “Sponsor”). The registration statement for the Company’s Initial Public Offering was declared effective on March 17, 2021. On March 23, 2021, the Company consummated its Initial Public Offering of 30,000,000 units (the “Units” and, with respect to the Class A ordinary shares included in the Units, the “Public Shares”), at $ 10.00 per Unit, generating gross proceeds of $ 300.0 million, and incurring underwriting fees and other offering costs of approximately $ 17.2 million, inclusive of approximately $ 10.5 million in deferred underwriting commissions (see Note 6). The underwriter was granted a 45-day option from the date of the final prospectus relating to the Initial Public Offering to purchase up to 4,500,000 additional Units to cover over-allotments, if any, at $ 10.00 per Unit. On April 7, 2021, the underwriter exercised the over-allotment option in part and purchased an additional 2,369,251 Units (the “Over-Allotment Units”), generating gross proceeds of $ 23,692,510 . Simultaneously with the closing of the Initial Public Offering, the Company consummated the private placement (“Private Placement”) of 1,030,000 Units (the “Private Placement Units”) at a price of $ 10.00 per Private Placement Unit, generating total gross proceeds of $ 10.3 million (see Note 4). Upon the closing of the Initial Public Offering and the Private Placement, $300.0 million ($10.00 per Unit) of the net proceeds of the Initial Public Offering and certain of the proceeds of the Private Placement was placed in a trust account (“Trust Account”) and will be 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 certain conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the funds in the Trust Account to the Company’s shareholders, as described below. In addition, the Company transferred an excess amount of $900,000 into the Trust Account upon closing of the Initial Public Offering. If the over-allotment was not exercised, such amount would be transferred back into the Company’s operating bank account. The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Units, although substantially all of the net proceeds are intended to be applied generally toward completing a Business Combination. The Company must complete its initial Business Combination with one or more target businesses that together have a fair market value equal to at least 80 % of the net assets held in the Trust Account (excluding the amount of any deferred underwriting commissions held in the Trust Account) at the time of the agreement to enter into a Business Combination. The Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50 % or more of the issued and outstanding voting securities of the target 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 BYTE ACQUISITION CORP. NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS The Company will provide its shareholders of the Public Shares (the “Public Shareholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a shareholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company. The Public Shareholders will be entitled to redeem their Public Shares for a pro rata portion of the amount held in the Trust Account (at $ 10.00 per share), calculated as of two business days prior to the completion of a Business Combination, including 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. There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants. The Class A ordinary shares were recorded at redemption value and classified as temporary equity in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity” (“ASC 480”). If the Company seeks shareholder approval, the Company will complete a Business Combination only if it receives an ordinary resolution under Cayman Islands law approving a Business Combination, which requires the affirmative vote of a majority of the shareholders who vote at a general meeting of the Company. If a shareholder vote is not required under applicable law or stock exchange listing requirements and the Company does not decide to hold a shareholder vote for business or other reasons, the Company will, pursuant to its Amended and Restated Memorandum and Articles of Association, conduct the redemptions pursuant to the tender offer rules of the Securities and Exchange Commission (“SEC”), and file tender offer documents containing substantially the same information as would be included in a proxy statement with the SEC prior to completing a Business Combination. If the Company seeks shareholder approval in connection with a Business Combination, the Sponsor agreed to vote its Founder Shares (as defined in Note 5), the Class A ordinary shares underlying the Private Placement Units (the “Private Placement Shares”) and any Public Shares purchased in or after the Initial Public Offering in favor of approving a Business Combination and to waive its redemption rights with respect to any such shares in connection with a shareholder vote to approve a Business Combination. However, in no event will the Company redeem its Public Shares in an amount that would cause its net tangible assets to be less than $ 5,000,001 . In such case, the Company would not proceed with the redemption of its Public Shares and the related Business Combination, and instead may search for an alternate Business Combination. Additionally, each Public Shareholder may elect to redeem its Public Shares, without voting, and if they do vote, irrespective of whether they vote for or against a proposed Business Combination. Notwithstanding the foregoing, if the Company seeks shareholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Company’s Amended and Restated Memorandum and Articles of Association provides that a Public Shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15 % of the Public Shares without the Company’s prior written consent. The Sponsor agreed (a) to waive its redemption rights with respect to any Founder Shares and Public Shares held by it in connection with the completion of a Business Combination and (b) not to propose an amendment to the Amended and Restated Memorandum and Articles of Association (i) to modify the substance or timing of the Company’s obligation to redeem 100% of the Public Shares if the Company does not complete a Business Combination within the Combination Period (as defined below) or (ii) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity, unless the Company provides the Public Shareholders with the opportunity to redeem their Public Shares in conjunction with any such amendment and (iii) to waive its rights to liquidating distributions from the Trust Account with respect to the Founder Shares if the Company fails to complete a Business Combination. The Company will have until 24 months from the closing of the Initial Public Offering, or March 23, 2023 (the “Combination Period”) to complete a Business Combination. If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than 10 business days thereafter, redeem 100% of the outstanding Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned (less taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders and the Company’s board of directors, dissolve and liquidate, subject in each case to its obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. 6 BYTE ACQUISITION CORP. NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS The Sponsor agreed to waive its liquidation rights with respect to the Founder Shares and Private Placement Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Sponsor acquires Public Shares in or after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period. The underwriters agreed to waive their rights to their deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the Initial Public Offering price per Unit ($ 10.00 ). The Sponsor 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 by a prospective target business with which the Company has entered into a written letter of intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (1) $10.00 per Public Share and (2) 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 Public Share due to reductions in the value of trust assets, less taxes payable. This 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 nor will it apply to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (other than the Company’s independent public accountants), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account. Liquidity and Capital Resources As of September 30, 2021, the Company had approximately $ 1.7 million in its operating bank account and working capital of approximately $ 2.5 million. The Company’s liquidity through the consummation of the Initial Public Offering were satisfied through the payment of $ 25,000 from the Sponsor to cover certain offering costs on behalf of the Company in exchange for the issuance of the Founder Shares (as defined below), the loan under the Note from the Sponsor of approximately $ 149,000 (see Note 5) to the Company, and the net proceeds from the consummation of the Private Placement not held in the Trust Account. The Company fully repaid the Note on March 25, 2021. In addition, in order to finance transaction costs in connection with a Business Combination, the Company’s officers, directors and Initial Shareholders may, but are not obligated to, provide the Company Working Capital Loans (see Note 5). To date, there were no amounts outstanding under any Working Capital Loans. Based on the foregoing, management believes that the Company will have sufficient working capital and borrowing capacity to meet its needs through the earlier of the consummation of a Business Combination or one year from this filing. Over this time period, the Company will be using these funds for paying existing accounts payable, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination. Risks and Uncertainties Management continues to evaluate the impact of the COVID-19 pandemic and has concluded that the specific impact is not readily determinable as of the date of the condensed balance sheet. The condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty. 7 BYTE ACQUISITION CORP. NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS Note 2 - Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed financial statements of the Company have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP. In the opinion of management, all adjustments (consisting of normal accruals) considered for a fair presentation have been included. Operating results for the three months ended September 30, 2021 and for the period from January 8, 2021 (inception) through September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. The accompanying unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Form 8-K and the final prospectus filed by the Company with the SEC on March 29, 2021 and March 19, 2021, respectively. In April 2021, the Company identified an error in its accounting treatment for both its public and private warrants (Warrants) as presented in its audited balance sheet as of March 23, 2021 included in its Current Report on Form 8-K, filed March 29, 2021. The Warrants were reflected as a component of equity as opposed to liabilities on the balance sheet. The impact of the error correction is reflected in the unaudited condensed financial statements contained herein which resulted in a $ 14.4 million increase to derivative liabilities and offsetting decrease to Class A ordinary shares subject to possible redemption to the March 23, 2021 balance sheet. There was an impact on the offering costs allocated to warrant liability. Restatement of Previously Reported Financial Statements In preparation of the Company’s unaudited condensed financial statements for the quarterly period ended September 30, 2021, the Company concluded it should restate its previously issued financial statements to classify all Public Shares in temporary equity. In accordance with the SEC and its staff’s guidance on redeemable equity instruments in ASC 480-10-S99, redemption provisions not solely within the control of the Company require shares subject to redemption to be classified outside of permanent equity. The Company had previously classified a portion of its Public Shares in permanent equity. Although the Company did not specify a maximum redemption threshold, its charter provides that currently, the Company will not redeem its Public Shares in an amount that would cause its net tangible assets to be less than $ 5,000,001 . Previously, the Company did not consider redeemable shares classified as temporary equity as part of net tangible assets. Effective with these condensed financial statements, the Company revised this interpretation to include temporary equity in net tangible assets. In accordance with SEC Staff Accounting Bulletin No. 99, “Materiality,” and SEC Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,” the Company evaluated the corrections and has determined that the related impact was material to the previously filed financial statements that contained the error, reported in the Company’s Form 8-K filed with the SEC on March 29, 2021 (the “Post-IPO Balance Sheet”) and the Company’s Form 10-Qs for the quarterly periods ended March 31, 2021, and June 30, 2021 (the “Affected Quarterly Periods”). Therefore, the Company, in consultation with its Audit Committee, concluded that the Post-IPO Balance Sheet and the Affected Quarterly Periods should be restated to present all Public Shares as temporary equity and to recognize accretion from the initial book value to redemption value at the time of its Initial Public Offering and the Over-Allotment. As such, the Company is reporting these restatements to those periods in this Quarterly Report. The previously presented Post-IPO Balance Sheet and Affected Quarterly Periods should no longer be relied upon. The impact of the restatement to the Post-IPO Balance Sheet is an increase to Class A ordinary shares subject to possible redemption of approximately $ 26.4 million, a decrease to additional paid-in capital of $ 5.9 million, an increase to the accumulated deficit of $ 20.5 million, and the reclassification of 2,640,808 Class A ordinary shares from permanent equity to Class A ordinary shares subject to possible redemption. As of March 23, 2021 As Reported Adjustment As Restated Total assets $ 303,847,702 $ 303,847,702 Total liabilities $ 25,255,778 $ 25,255,778 Class A ordinary shares subject to possible redemption 273,591,920 26,408,080 300,000,000 Preference shares - - - Class A ordinary shares 264 ( 161 ) 103 Class B ordinary shares 863 - 863 Additional paid-in capital 5,881,028 ( 5,881,028 ) - Retained earnings (accumulated deficit) ( 882,151 ) ( 20,526,891 ) ( 21,409,042 ) Total shareholders’ equity (deficit) $ 5,000,004 $ ( 26,408,080 ) $ ( 21,408,076 ) Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Equity (Deficit) $ 303,847,702 $ - $ 303,847,702 8 BYTE ACQUISITION CORP. NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS The impact of the restatement on the financial statements for the Affected Quarterly Periods is presented below. The table below presents the effect of the financial statement adjustments related to the restatement discussed above of the Company’s previously reported balance sheet as of March 31, 2021: As of March 31, 2021 As Reported Adjustment As Restated Total assets $ 303,677,311 $ 303,677,311 Total liabilities $ 25,437,952 $ 25,437,952 Class A ordinary shares subject to possible redemption 273,239,350 26,760,650 300,000,000 Preference shares - - - Class A ordinary shares 371 ( 268 ) 103 Class B ordinary shares 863 - 863 Additional paid-in capital 6,233,491 ( 6,233,491 ) - Retained earnings (accumulated deficit) ( 1,234,716 ) ( 20,526,891 ) ( 21,761,607 ) Total shareholders’ equity (deficit) $ 5,000,009 $ ( 26,760,650 ) $ ( 21,760,641 ) Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Equity (Deficit) $ 303,677,311 $ - $ 303,677,311 The table below presents the effect of the financial statement adjustments related to the restatement discussed above of the Company’s previously reported statement of cash flows for the period from January 8, 2021 (inception) through March 31, 2021: Form 10-Q: For the Period From January 8, 2021 (Inception) Through March 31, 2021 As Reported Adjustment As Restated Cash Flows Used In Operating Activities $ ( 1,181,799 ) $ - $ ( 1,181,799 ) Cash Flows Used In Investing Activities $ ( 300,900,000 ) $ - $ ( 300,900,000 ) Cash Flows Provided By Financing Activities $ 303,710,581 $ - $ 303,710,581 Supplemental Disclosure of Noncash Financing Activities: Offering costs included in accounts payable $ 21,866 $ - $ 21,866 Offering costs included in accrued expenses $ 70,000 $ - $ 70,000 Offering costs paid by related party under promissory note $ 146,289 $ - $ 146,289 Deferred underwriting commissions in connection with the initial public offering $ 10,500,000 $ - $ 10,500,000 Initial value of Class A ordinary shares subject to possible redemption $ 288,041,470 $ ( 288,041,470 ) $ - Change in value of Class A ordinary shares subject to possible redemption $ ( 14,802,120 ) $ 14,802,120 $ - The table below presents the effect of the financial statement adjustments related to the restatement discussed above of the Company’s previously reported balance sheet as of June 30, 2021: As of June 30, 2021 As Reported Adjustment As Restated Total assets $ 326,509,384 $ 326,509,384 Total liabilities $ 31,793,798 $ 31,793,798 Class A ordinary shares subject to possible redemption 289,715,580 33,976,930 323,692,510 Preference shares - - - Class A ordinary shares 443 ( 340 ) 103 Class B ordinary shares 809 - 809 Additional paid-in capital 10,946,615 ( 10,946,615 ) - Retained earnings (accumulated deficit) ( 5,947,861 ) ( 23,029,975 ) ( 28,977,836 ) Total shareholders’ equity (deficit) $ 5,000,006 $ ( 33,976,930 ) $ ( 28,976,924 ) Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Equity (Deficit) $ 326,509,384 $ - $ 326,509,384 9 BYTE ACQUISITION CORP. NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS The table below presents the effect of the financial statement adjustments related to the restatement discussed above of the Company’s previously reported statement of cash flows for the period from January 8, 2021 (inception) through June 30, 2021: Form 10-Q: For the Period From January 8, 2021 (Inception) Through June 30, 2021 As Reported Adjustment As Restated Cash Flows Used In Operating Activities $ ( 1,393,953 ) $ - $ ( 1,393,953 ) Cash Flows Used In Investing Activities $ ( 323,692,510 ) $ - $ ( 323,692,510 ) Cash Flows Provided By Financing Activities $ 326,908,374 $ - $ 326,908,374 Supplemental Disclosure of Noncash Financing Activities: Offering costs included in accrued expenses $ 70,000 $ - $ 70,000 Offering costs paid by related party under promissory note $ 146,289 $ - $ 146,289 Deferred underwriting commissions in connection with the initial public offering $ 11,329,237 $ - $ 11,329,237 Initial value of Class A ordinary shares subject to possible redemption $ 288,041,470 $ ( 288,041,470 ) $ - Change in value of Class A ordinary shares subject to possible redemption $ 1,674,110 $ ( 1,674,110 ) $ - In connection with the change in presentation for the Class A ordinary shares subject to possible redemption, the Company has revised its earnings per share calculation to allocate income and losses shared pro rata between the two classes of shares. This presentation contemplates a Business Combination as the most likely outcome, in which case, both classes of shares participate pro rata in the income and losses of the Company. The impact to the reported amounts of weighted average shares outstanding and basic and diluted earnings per common share is presented below for the Affected Quarterly Periods: The table below presents the effect of the financial statement adjustments related to the restatement discussed above to the Company’s previously reported statement of shareholders’ equity for the period from January 8, 2021 (inception) through June 30, 2021: For the Three Months Ended June 30, 2021 and for the Period From January 8, 2021 (Inception) through June 30, 2021 As Reported Adjustment As Restated Balance - January 8, 2021 (inception) $ - $ - $ - Issuance of Class B ordinary shares to Sponsor 25,000 - 25,000 Sale of shares in initial public offering, less allocation to derivative warrant liabilities, gross 285,550,450 ( 285,550,450 ) - Offering costs ( 16,401,375 ) 16,401,375 - Sale of shares in initial private offering, less allocation to derivative warrant liabilities, gross 10,300,000 ( 499,550 ) 9,800,450 Shares subject to possible redemption ( 273,239,350 ) 273,239,350 - Accretion of Class A ordinary shares subject to possible redemption amount - ( 32,854,514 ) ( 32,854,514 ) Net loss ( 1,234,716 ) - ( 1,234,716 ) Balance - March 31, 2021 (Unaudited) $ - $ ( 19,303,072 ) $ ( 19,303,072 ) Sale of shares in initial public offering, less allocation to derivative warrant liabilities, gross (Over-allotment) 285,550,450 ( 285,550,450 ) - Offering costs ( 1,235,587 ) 1,235,587 - Shares subject to possible redemption ( 16,476,230 ) 16,476,230 - Net loss $ ( 4,713,145 ) $ - $ ( 4,713,145 ) Balance - June 30, 2021 (Unaudited) $ - $ ( 19,985,729 ) $ ( 19,985,729 ) 10 BYTE ACQUISITION CORP. NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS EPS for Class A ordinary shares (redeemable) As Reported Adjustment As Adjusted Form 10-Q (March 31, 2021) - For the Period From January 8, 2021 (Inception) Through March 31, 2021 Net loss $ ( 1,234,716 ) $ - $ ( 1,234,716 ) Weighted average shares outstanding 28,639,679 ( 25,386,667 ) 3,253,012 Basic and diluted earnings per share $ - $ ( 0.11 ) $ ( 0.11 ) Form 10-Q (June 30, 2021) - three months ended June 30, 2021 Net loss $ ( 4,713,145 ) $ - $ ( 4,713,145 ) Weighted average shares outstanding 27,342,030 4,871,007 32,213,037 Basic and diluted earnings per share $ - $ ( 0.11 ) $ ( 0.11 ) Form 10-Q (June 30, 2021) - For the Period From January 8, 2021 (Inception) Through June 30, 2021 Net loss $ ( 5,947,861 ) $ - $ ( 5,947,861 ) Weighted average shares outstanding 28,639,679 ( 10,240,907 ) 18,398,772 Basic and diluted earnings per share $ - $ ( 0.22 ) $ ( 0.22 ) EPS for Class B ordinary shares (non-redeemable) As Reported Adjustment As Adjusted Form 10-Q (March 31, 2021) - For the Period From January 8, 2021 (Inception) Through March 31, 2021 Net loss $ ( 1,234,716 ) $ - $ ( 1,234,716 ) Weighted average shares outstanding 10,770,846 ( 1,687,587 ) 9,083,259 Basic and diluted earnings per share $ ( 0.11 ) $ ( 0.00 ) $ ( 0.11 ) Form 10-Q (June 30, 2021) - three months ended June 30, 2021 Net loss $ ( 4,713,145 ) $ - $ ( 4,713,145 ) Weighted average shares outstanding 7,647,505 1,435,754 9,083,259 Basic and diluted earnings per share $ ( 0.62 ) $ 0.51 $ ( 0.11 ) Form 10-Q (June 30, 2021) - For the Period From January 8, 2021 (Inception) Through June 30, 2021 Net loss $ ( 5,947,861 ) $ - $ ( 5,947,861 ) Weighted average shares outstanding 12,924,266 ( 4,542,964 ) 8,381,302 Basic and diluted earnings per share $ ( 0.46 ) $ 0.24 $ ( 0.22 ) 11 BYTE ACQUISITION CORP. NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS Emerging Growth Company 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 an 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 condensed financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Use of Estimates The preparation of financial statements in conformity with U.S. 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. 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 unaudited condensed financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. 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 had no cash equivalents held outside the Trust Account as of September 30, 2021. Investments Held in Trust Account The Company’s portfolio of investments is comprised solely of U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or investments in money market funds that invest in U.S. government securities and generally have a readily determinable fair value, or a combination thereof. When the Company’s investments held in the Trust Account are comprised of U.S. government securities, the investments are classified as trading securities. When the Company’s investments held in the Trust Account are comprised of money market funds, the investments are recognized at fair value. Trading securities and investments in money market funds are presented on the condensed balance sheet at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these securities is included in income from investments held in Trust Account in the accompanying unaudited condensed statements of operations. The estimated fair values of investments held in the Trust Account are determined using available market information. 12 BYTE ACQUISITION CORP. NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $ 250,000 , and investments held in Trust Account. At September 30, 2021, the Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts. Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the FASB ASC Topic 820, “Fair Value Measurements,” equal or approximate the carrying amounts represented in the condensed balance sheet. 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. U.S. 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 consist of: ● Level 1, defined as observable inputs such as quoted prices 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. In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement. Derivative Warrant Liabilities 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 share purchase warrants and forward purchase agreements, 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 Public Warrants and the Private Placement Warrants issued in connection with the Initial Public Offering and the Private Placement are recognized as derivative liabilities in accordance with ASC 815. In addition, based on management’s evaluation, the tender offer provision fails the indexation criteria as contemplated by ASC Section 815-40-25. As a result, the Company accounts for the Public Warrants as a liability. 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 initial estimated fair value of the warrants was measured using a Monte Carlo simulation. The subsequent estimated fair value of the Public Warrants is based on the listed price in an active market for such warrants while the fair value of the Private Placement Warrants continues to be measured using a Monte Carlo simulation. 13 BYTE ACQUISITION CORP. NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS Offering Costs Associated with the Initial Public Offering Offering costs consisted of legal, accounting, underwriting fees and other costs incurred through the Initial Public Offering that were directly related to the Initial Public Offering. Offering costs were allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair value basis, compared to total proceeds received. Offering costs associated with derivative warrant liabilities were expensed as incurred and presented as non-operating expenses in the condensed statements of operations. Offering costs associated with the Class A ordinary shares issued were charged against the carrying value of Class A ordinary shares subject to possible redemption upon the completion of the Initial Public Offering. The Company classifies deferred underwriting commissions as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities. Class A Ordinary Shares Subject to Possible Redemption The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in ASC 480. Class A ordinary shares subject to mandatory redemption (if any) is classified as liability instruments and are measured at fair value. Conditionally redeemable Class A ordinary shares (including Class A ordinary shares that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, Class A ordinary shares is classified as shareholders’ equity. The Company’s Public Shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, as of September 30, 2021, 32,369,251 Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ equity section of the Company’s condensed balance sheet. Effective with the closing of the Initial Public Offering (including sale of the Over-Allotment Units), the Company recognized the accretion from initial book value to redemption amount, which resulted in charges against additional paid-in capital (to the extent available) and accumulated deficit. Income Taxes The Company accounts for income taxes under FASB ASC Topic 740, “Income Taxes,” which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statement and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position 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 only major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 30, 2021. 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 an exempted Cayman Islands Company 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. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. Net Income Per Ordinary Share The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” The Company has two classes of shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Income and losses are shared pro rata between the two classes of shares. Net income per ordinary share is calculated by dividing the net income by the weighted average of ordinary shares outstanding for the respective period. 14 BYTE ACQUISITION CORP. NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS The calculation of diluted net income per ordinary shares does not consider the effect of the warrants issued in connection with the Initial Public Offering (including sale of the Over-Allotment Units) and the Private Placement to purchase an aggregate of 16,699,626 ordinary shares in the calculation of diluted income per share, because their exercise is contingent upon future events and their inclusion would be anti-dilutive under the treasury stock method. As a result, diluted net income per share is the same as basic net income per share for the three months ended September 30, 2021 and for the period from January 8, 2021 (inception) through September 30, 2021. Accretion associated with the redeemable Class A ordinary shares is excluded from net income per share as the redemption value approximates fair value. The following table reflects presents a reconciliation of the numerator and denominator used to compute basic and diluted net income per share for each class of ordinary shares: For the Three Months Ended September 30, 2021 For The Period From January 8, 2021 (inception) through September 30, 2021 Class A Class B Class A Class B Basic and diluted net income per ordinary share: Numerator: Allocation of net income $ 7,644,777 $ 2,154,453 $ 2,807,492 $ 1,043,877 Denominator: Basic and diluted weighted average ordinary shares outstanding 32,369,251 9,122,313 23,230,667 8,637,592 Basic and diluted net income per ordinary share $ 0.24 $ 0.24 $ 0.12 $ 0.12 Recent Accounting Pronouncements In August 2020, the FASB issued 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 U.S. GAAP. The ASU 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. The Company adopted ASU 2020-06 on January 8, 2021 (inception). Adoption of the ASU did not impact the Company’s 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 the accompanying unaudited condensed financial statements. Note 3 - Initial Public Offering On March 23, 2021, the Company consummated its Initial Public Offering of 30,000,000 Units, at $ 10.00 per Unit, generating gross proceeds of $ 300.0 million, and incurring underwriting fees and other offering costs of approximately $ 17.2 million, inclusive of approximately $ 10.5 million in deferred underwriting commissions. On April 7, 2021, the underwriter exercised the over-allotment option in part and purchased the Over-Allotment Units, generating gross proceeds of $ 23,692,510 , and 532,687 Founder Shares were subsequently forfeited by the Sponsor. Each Unit consists of one Class A ordinary share and one-half of one redeemable warrant (“Public Warrant”). Each whole Public Warrant entitles the holder to purchase one Class A ordinary share at an exercise price of $ 11.50 per share, subject to adjustment (see Note 9). 15 BYTE ACQUISITION CORP. NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS Note 4 - Private Placement Simultaneously with the closing of the Initial Public Offering, the Company consummated the Private Placement of 1,030,000 Private Placement Units at a price of $ 10.00 per Private Placement Unit, generating total gross proceeds of $ 10.3 million. The proceeds from the sale of the Private Placement Units were added to the net proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the private placement warrants underlying the Private Placement Units (the “Private Placement Warrants”) will expire worthless. Note 5 - Related Party Transactions Founder Shares On January 22, 2021, the Sponsor paid an aggregate of $ 25,000 to cover certain offering costs of the Company in consideration for 8,625,000 of the Company’s Class B ordinary shares (the “Founder Shares”). The Founder Shares included an aggregate of up to 1,125,000 shares subject to forfeiture by the Sponsor to the extent that the underwriters’ over-allotment was not exercised in full or in part, so that the number of Founder Shares would collectively represent 20 % of the Company’s issued and outstanding shares upon the completion of the Initial Public Offering (excluding the Private Placement Shares). On April 7, 2021, the underwriter exercised its over-allotment option in part, and 532,687 Founder Shares were subsequently forfeited by the Sponsor. The Sponsor agreed, subject to limited exceptions, not to transfer, assign or sell any of its Founder Shares until the earlier to occur of: (A) one year after the completion of a Business Combination; and (B) subsequent to a Business Combination, (x) if the closing price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 120 days after a Business Combination, or (y) the date on which the Company completes a liquidation, merger, amalgamation, share exchange, reorganization or other similar transaction that results in all of the Company’s shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property. Promissory Note - Related Party On January 22, 2021, the Company entered into a promissory note with the Sponsor, pursuant to which the Company could have borrowed up to an aggregate principal amount of $ 251,000 (the “Note”). The Note was non-interest bearing and payable upon the completion of the Initial Public Offering. The Company borrowed approximately $ 149,000 under the Note and fully repaid the Note on March 25, 2021. Related Party Loans In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes may be repaid upon completion of a Business Combination, without interest, or, at the lender’s discretion, up to $ 1,500,000 of the notes may be converted upon completion of a Business Combination into private placement-equivalent units at a price of $ 10.00 per unit. Such units would be identical to the Private Placement Units. In the event that a Business Combination does not close, the Company may use a portion of 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. As of September 30, 2021, the Company had no borrowings under the Working Capital Loans. 16 BYTE ACQUISITION CORP. NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS Administrative Services Agreement The Company entered into an agreement that provides that, commencing on effective date of the Initial Public Offering, the Company agreed to pay the Sponsor $ 10,000 per month for office space, utilities, secretarial and administrative support services. Upon completion of a Business Combination or its liquidation, the Company will cease paying these monthly fees. During the three months ended September 30, 2021 and the period from January 8, 2021 (inception) through September 30, 2021 the Company incurred $ 30,000 and $ 70,000 of such fees, reported as general and administrative expenses - related party in the accompanying condensed statements of operations, respectively. Note 6 - Commitments and Contingencies Registration and Shareholder Rights The holders of the Founder Shares, Private Placement Units (including the underlying securities) and securities that may be issued upon conversion of the Working Capital Loans were entitled to registration rights pursuant to a registration rights agreement signed upon the effective date of the Initial Public Offering requiring the Company to register a sale of any of the securities held by them, including any other securities of the Company acquired by them prior to the consummation of the Company’s initial Business Combination. The holders of these securities were entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Underwriting Agreement The Company granted the underwriters a 45-day option to purchase up to 4,500,000 additional Units to cover over-allotments at the Initial Public Offering price, less the underwriting discounts and commissions. On April 7, 2021, the underwriter exercised the over-allotment option in part and purchased the Over-Allotment Units, generating gross proceeds of $ 23,692,510 . The underwriters received a cash underwriting discount of $0.20 per Unit, or $6.5 million in the aggregate, paid upon the closing of the Initial Public Offering and sale of Over-Allotment Units. In addition, the underwriters were entitled to a deferred fee of $0.35 per Unit, or $11.3 million in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement. Note 7 - Class A Ordinary Shares Subject to Possible Redemption The Company’s Public Shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of future events. As of September 30, 2021, there were 32,369,251 Class A ordinary shares subject to possible redemption and classified outside of permanent equity in the condensed balance sheet. The Class A ordinary shares subject to possible redemption reflected on the balance sheet is reconciled on the following table: Gross proceeds from Initial Public Offering, including sale of the Over-Allotment Units $ 323,692,510 Less: Fair value of Public Warrants at issuance ( 15,217,550 ) Offering costs allocated to Class A ordinary shares subject to possible redemption ( 17,636,964 ) Plus: Accretion on Class A ordinary shares subject to possible redemption amount 32,854,514 Class A ordinary shares subject to possible redemption $ 323,692,510 17 BYTE ACQUISITION CORP. NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS Note 8 - Shareholders’ Equity Preference Shares - The Company is authorized to issue 1,000,000 preference shares with a par value of $ 0.0001 per share. The Company’s board of directors will be authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. The board of directors will be able to, without shareholder approval, issue preferred shares with voting and other rights that could adversely affect the voting power and other rights of the holders of the ordinary shares and could have anti-takeover effects. At September 30, 2021, there were no preference shares issued or outstanding. Class A Ordinary Shares - The Company is authorized to issue 200,000,000 Class A ordinary shares with a par value of $ 0.0001 per share. Holders of the Company’s Class A ordinary shares are entitled to one vote for each share. At September 30, 2021, there were 1,030,000 Class A ordinary shares issued or outstanding, excluding 32,369,251 Class A ordinary shares subject to possible redemption, which have been classified as temporary equity (see Note 7). Class B Ordinary Shares - The Company is authorized to issue 20,000,000 Class B ordinary shares with a par value of $ 0.0001 per share. Holders of the Class B ordinary shares are entitled to one vote for each share. As of March 31, 2021, there were 8,625,000 Class B ordinary shares issued and outstanding, of which an aggregate of up to 1,125,000 shares were subject to forfeiture to the extent that the underwriters’ over-allotment option was not exercised in full or in part so that the number of Founder Shares will equal 20 % of the Company’s issued and outstanding ordinary shares after the Initial Public Offering (excluding the Private Placement Shares). On April 7, 2021, the underwriter exercised its over-allotment in part, and 532,687 Class B ordinary shares were subsequently forfeited. Only holders of the Class B ordinary shares will have the right to vote on the election of directors prior to the Business Combination. Holders of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class on all other matters submitted to a vote of the Company’s shareholders except as otherwise required by law. The Class B ordinary shares will automatically convert into Class A ordinary shares concurrently with or immediately following the completion of a Business Combination on a one-for-one basis, subject to adjustment. In the case that additional Class A ordinary shares or equity-linked securities are issued or deemed issued in connection with a Business Combination, the number of Class A ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate, 20 % of the total number of Class A ordinary shares outstanding after such conversion (excluding the private placement shares underlying the private placement units and after giving effect to any redemptions of Class A ordinary shares by public shareholders), including the total number of Class A ordinary shares issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of a Business Combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, or to be issued, to any seller in a Business Combination and any private placement-equivalent units issued to the Sponsor, officers or directors upon conversion of Working Capital Loans; provided that such conversion of Founder Shares will never occur on a less than one-for-one basis. Note 9 - Warrants As of September 30, 2021, there were 16,184,626 and 515,000 Public Warrants and Private Placement Warrants, respectively, outstanding. Public Warrants may only be exercised for a whole number of shares. No fractional warrants will be issued upon separation of the Units and only whole warrants will trade. The Public Warrants will become exercisable 30 days after the completion of a Business Combination. The Public Warrants will expire five years from the completion of a Business Combination, or earlier upon redemption or liquidation. The Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a registration statement under the Securities Act with respect to the Class A ordinary shares underlying the warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration. No warrant will be exercisable and the Company will not be obligated to issue a Class A ordinary share upon exercise of a warrant unless the Class A ordinary share issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants. 18 BYTE ACQUISITION CORP. NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS The Company is registering the Class A ordinary shares issuable upon exercise of the warrants in the registration statement of which this prospectus forms a part because the warrants will become exercisable 30 days after the completion of its initial business combination, which may be within one year of this offering. However, because the warrants will be exercisable until their expiration date of up to five years after the completion of the Company’s initial business combination, in order to comply with the requirements of Section 10(a)(3) of the Securities Act following the consummation of the Company’s initial business combination, under the terms of the warrant agreement, the Company agreed that, as soon as practicable, but in no event later than 15 business days, after the closing of its initial business combination, the Company will use its best efforts to file with the SEC a post-effective amendment to the registration statement of which this prospectus forms a part or a new registration statement covering the registration under the Securities Act of the Class A ordinary shares issuable upon exercise of the warrants and thereafter will use its best efforts to cause the same to become effective within 60 business days following its initial business combination and to maintain a current prospectus relating to the Class A ordinary shares issuable upon exercise of the warrants until the expiration of the warrants in accordance with the provisions of the warrant agreement. If a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective by the 60th business day after the closing of a 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. In addition, 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 the 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 elects to do so, the Company will not be required to file or maintain in effect a registration statement, but it will use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00: Once the warrants become exercisable, the Company may call the outstanding warrants for redemption (except as described 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 share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending three business days before the Company sends to the notice of redemption to the warrant holders (the “Reference Value”). If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. 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 a price of $0.10 per Public Warrant; ● upon not less than 30 days’ prior written notice of redemption to each warrant holder; 19 BYTE ACQUISITION CORP. NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS ● if, and only if, the Reference Value equals or exceeds $10.00 per Public Share (as adjusted) 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; and ● if the Reference Value is less than $18.00 per share (as adjusted), the Private Placement Warrants must also be concurrently called for redemption on the same terms as the outstanding Public Warrants, as described above. If the Company calls the Public Warrants for redemption, as described above, its management will have the option to require any holder that wishes to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of ordinary shares issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the Public Warrants will not be adjusted for issuances of ordinary shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of Public Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless. 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 a Business Combination at an issue price or effective issue price of less than $ 9.20 per Class A 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 a Business Combination, 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 a Business Combination (such price, the “Market Value”) is below $ 9.20 per share, then 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, and the $ 18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180 % of the higher of the Market Value and the Newly Issued Price. The Private Placement Warrants will be identical to the Public Warrants underlying the Units being sold in the Initial Public Offering, except that (x) the Private Placement Warrants and the Class A ordinary shares issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions, (y) the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees and (z) the Private Placement Warrants and the Class A ordinary shares issuable upon exercise of the Private Placement Warrants will be entitled to registration rights. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. Note 10 - Fair Value Measurements The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2021 and indicates the fair value hierarchy of the valuation techniques that the Company utilized to determine such fair value. Description Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3) Assets: Investments held in Trust Account - Money market fund $ 323,709,480 $ - $ - Liabilities: Derivative warrant liabilities - Public warrants $ 10,034,470 $ - $ - Derivative warrant liabilities - Private placement warrants $ - $ 319,300 $ - 20 BYTE ACQUISITION CORP. NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS Transfers to/from Levels 1, 2, and 3 are recognized at the beginning of the reporting period. The estimated fair value of the Public Warrants was transferred from a Level 3 measurement to a Level 1 measurement in May 2021, when the Public Warrants were separately listed and traded in an active market. The estimated fair value of the Private Placement Warrants was transferred from a Level 3 measurement to a Level 2 measurement in May 2021, as the key inputs to the valuation model became directly or indirectly observable from the Public Warrants listed price. The initial estimated fair value of the warrants was measured using a Monte Carlo simulation. The subsequent estimated fair value of the Public Warrants is based on the listed price in an active market for such warrants while the fair value of the Private Placement Warrants continues to be measured using a Monte Carlo simulation, with level 2 inputs. For the three months ended September 30, 2021 and for the period from January 8, 2021 (inception) through September 30, 2021, the Company recognized a gain resulting from changes in the fair value of derivative warrant liabilities of approximately $ 10.0 million and $ 5.4 million, respectively, which is presented in the accompanying condensed statements of operations. The following table provides quantitative information regarding Level 3 fair value measurements inputs at their measurement dates: March 23, 2021 April 7, 2021 Exercise price $ 11.50 $ 11.50 Share price $ 9.53 $ 9.51 Volatility 15.6 % 15.7 % Term 6.5 6.5 Risk-free rate 1.18 % 1.21 % The change in the fair value of derivative liabilities, measured using Level 3 inputs, for the period ended September 30, 2021 is summarized as follows: Derivative warrant liabilities at March 23, 2021 (inception) $ - Issuance of Public and Private Warrants 14,449,550 Change in fair value of derivative warrant liabilities 294,850 Derivative warrant liabilities at March 31, 2021 $ 14,744,400 Issuance of Public Warrants; over-allotment 1,267,550 Transfer of Public Warrants to Level 1 ( 15,517,550 ) Transfer of Private Placement Warrants to Level 2 ( 494,400 ) Derivative warrant liabilities at June 30, 2021 $ - Derivative warrant liabilities at September 30, 2021 $ - Note 11 - Subsequent Events Management has evaluated subsequent events and transactions that occurred after the condensed balance sheet date through the date these unaudited condensed financial statements were issued. Based upon this review, except as noted above, the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed financial statements. 21