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Item 2. Management’s Discussion and Analysis

2022-05-20 compared with 2021-11-04 · 136 added, 57 removed, 49 unchanged (80% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

References to the “Company,” “our,” “us” or “we” refer to Crown PropTech Acquisitions.

References to the “Company,” “Crown,” “our,” “us” or “we” refer to Crown PropTech Acquisitions.

The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto contained elsewhere in this report.

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Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other Securities and Exchange Commission (“SEC”) filings.

We are a blank check company incorporated as a Cayman Islands exempted company on September 24, 2020 for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”).

Our sponsor is Crown PropTech Sponsor, LLC, a Cayman Islands exempted company (“sponsor”)

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There will be no redemption rights or liquidating distributions with respect to our outstanding warrants, which will expire worthless if we fail to consummate a business combination within the Combination Period.

Proposed Brivo Transaction

On November 10, 2021, we entered into a business combination agreement (as it may be amended, supplemented or otherwise modified from time to time, the “BCA” or the “Business Combination Agreement”), by and among (i) us, (ii) Crown PropTech Merger Sub I Corp, a Delaware corporation and wholly owned direct subsidiary of Crown (“Merger Sub I”), (iii) Crown PropTech Merger Sub II LLC, a Delaware limited liability company and a wholly owned subsidiary of Crown (“Merger Sub II”, and together with Merger Sub I the “Merger Subs”) and (iv) Brivo, Inc., a Nevada corporation (“Brivo”).

On May 12, 2022 we entered into a First Amendment to the Business Combination Agreement, which provides for an amendment to the definition of the “Outside Date” in the Business Combination Agreement and changes the date listed therein from July 10, 2022 to August 9, 2022 or such later date as may be mutually agreed by us and Brivo.

All other terms of the Business Combination Agreement remain unmodified and in full force and effect.

Subject to the terms and conditions of the BCA, the following transactions will occur:

(a) On the day prior to the closing date of the Brivo Business Combination (as defined below) (the “Closing Date”), Crown will change its jurisdiction of incorporation by deregistering as a Cayman Islands exempted company and continuing and domesticating as a corporation incorporated under the laws of the State of Delaware (the “Domestication”), upon which Crown will change its name to “Brivo, Inc.” (“New Brivo”).

The Domestication, the Mergers and the other transactions contemplated by the Business Combination Agreement are hereinafter referred to as the “Brivo Business Combination”.

(b) On the Closing Date, (i) each share of Brivo Series A-1 preferred stock will be canceled and converted into one share of Brivo Class B common stock and (ii) each share of Brivo Series A-2 preferred stock will be canceled and converted into one share of Brivo Class A common stock (collectively, the “Conversion”).

(c) Immediately after the Conversion, (i) Merger Sub I will merge with and into Brivo (the “First Merger” and the effective time of the First Merger, the “First Effective Time”), with Brivo as the surviving corporation of the First Merger (the “Surviving Corporation”), and (ii) immediately following the First Merger and as part of the same overall transaction as the First Merger, the Surviving Corporation will merge with and into Merger Sub II (the “Second Merger” and together with the First Merger, the “Mergers”), with Merger Sub II continuing as the surviving entity of the Second Merger and, after giving effect to the Second Merger, Merger Sub II will be a wholly owned direct subsidiary of New Brivo.

In accordance with the terms and subject to the conditions of the BCA, at the First Effective Time, based on (i) an implied equity value of $800 million plus approximately $2 million representing the aggregate exercise price of vested Brivo options and (ii) a $10.00 per share price for New Brivo Common Stock, (A) subject to the following paragraph, each share of Brivo Class A common stock (excluding dissenting shares and after giving effect to the Conversion) will be canceled and converted into the right to receive the applicable portion of the merger consideration comprised of shares of Class A common stock, par value $0.0001 per share, of New Brivo (the “New Brivo Class A Common Stock”), as determined in the BCA (the “Share Conversion Ratio”), (B) subject to the following paragraph, each share of Brivo Class B common stock (excluding dissenting shares and after giving effect to the Conversion) will be canceled and converted into the right to receive the applicable portion of the merger consideration comprised of shares of Class B common stock, par value $0.0001 per share, of New Brivo (and together with the New Brivo Class A Common Stock, the “New Brivo Common Stock”), as determined pursuant to the Share Conversion Ratio, (C) subject to the following paragraph, each restricted stock unit of Brivo (whether vested or unvested, although only the vested restricted stock units will be taken into account in calculating the Share Conversion Ratio) will be assumed by New Brivo and converted into a comparable restricted stock unit of New Brivo based on the Share Conversion Ratio (each, a “New Brivo RSU”) and (D) subject to the following paragraph, each option of Brivo (whether vested or unvested, although only the vested options will be taken into account in calculating the Share Conversion Ratio) will be assumed by New Brivo and converted into a comparable option that is exercisable for shares of New Brivo Class A Common Stock (and, with regard to options that are intended to qualify as “incentive stock options” under Section 422 of the Internal Revenue Code of 1986 (the “Code”), in a manner compliant with Section 424(a) of the Code) (each, a “New Brivo Option”).

A portion of the consideration payable under the prior paragraph will be paid:

(i) in the case of consideration payable to Brivo stockholders, in the form of earn-out shares of New Brivo Common Stock (the “Brivo Earn-Out Shares”) and (ii) in the case of consideration payable to Brivo equity award holders, in the form of restricted stock units relating to shares of New Brivo Class A Common Stock (the “Brivo Earn-Out RSUs” and together with the Brivo Earn-Out Shares, the “Brivo Earn-Out Consideration”).

The Brivo Earn-Out Consideration consists of 8,500,000 shares of New Brivo Common Stock (including the shares of New Brivo Common Stock underlying the Brivo Earn-Out RSUs).

The Brivo Earn-Out Consideration will vest in two equal 4,250,000 tranches based on the achievement of post-Closing share price targets of New Brivo Class A Common Stock of $13.00 and $15.00, respectively, in each case, for any 20 trading days within any 30 trading day period commencing at any time after 180 days after the Closing Date and ending on or prior to the fifth anniversary of the Closing Date.

A given achievement metric described above will also be achieved if there is a transaction during the relevant period that results in the shares of New Brivo Common Stock being converted into the right to receive cash or other consideration having a per share value (in the case of any non-cash consideration, as provided in the definitive transaction documents for such transaction, or if not so provided, as determined by the New Brivo board of directors in good faith) in excess of the applicable post-Closing share price target set forth above.

Brivo Earn-Out Consideration that has not vested by the fifth anniversary of the Closing Date shall, automatically and without further action on the part of New Brivo or any holder thereof, be forfeited and cancelled for no consideration.

Brivo Earn-Out RSUs will also be forfeited if the employment of the relevant employee terminates prior to the vesting date of the underlying equity award.

Prior to vesting or forfeiture, the Brivo Earn-Out Shares will, with limited exceptions, be entitled to all rights of other shares of New Brivo Common Stock, and the Brivo Earn-Out RSUs will be entitled to payments equivalent to the dividends that would have been paid on the shares underlying those Brivo Earn-Out RSUs.

The total number of shares of New Brivo Common Stock to be issued pursuant to the prior two paragraphs (including the shares underlying the vested New Brivo RSUs, the vested New Brivo Options and the Brivo Earn-Out RSUs, but excluding the shares underlying the unvested New Brivo RSUs and the unvested New Brivo Options) will be approximately 80,200,000.

As of the anticipated Closing Date, it is expected that all unvested New Brivo RSUs will have vested or been terminated and there will be approximately 991,000 shares of New Brivo Common Stock underlying the unvested New Brivo Options.

In connection with the Brivo Business Combination, Crown has filed a Registration Statement on Form S-4 (File No.

333-261857) (as amended, the “Registration Statement”), which includes a preliminary proxy statement of the Company and a prospectus in connection with the Brivo Business Combination.

The definitive proxy statement/prospectus and other relevant documentation will be mailed to Crown shareholders as of a record date to be established for purposes of voting on the Brivo Transaction.

Crown shareholders and other interested persons are advised to read, when available, the preliminary proxy statement/prospectus and any amendments thereto, and the definitive proxy statement/prospectus in connection with the solicitation of proxies for the extraordinary general meeting to be held to approve the transactions contemplated by the proposed Brivo Transaction because these materials will contain important information about Brivo, Crown and the proposed transactions.

Shareholders will also be able to obtain a copy of the preliminary proxy statement/prospectus and the definitive proxy statement/prospectus once they are available, without charge, at the SEC’s website at http://sec.gov or by directing a request to:

Crown PropTech Acquisitions Corp., 667 Madison Avenue, New York, NY 10065.

In connection with the signing of the Business Combination Agreement, Crown entered into certain subscription agreements (the “Subscription Agreements”) with certain investors (the “Convertible Debt Investors’), pursuant to which the Convertible Debt Investors agreed to subscribe for and purchase, and Crown agreed to issue and sell to the Convertible Debt Investors, following the Domestication, an aggregate of $75.0 million in principal amount of convertible notes to be issued pursuant to an indenture (the “Indenture”), or the Convertible Debt Notes, for aggregate gross proceeds of $75.0 million.

The Convertible Debt Notes are convertible at the option of holders into New Brivo Class A Common Stock at a conversion price of $11.50 per share.

One of the Convertible Debt Investors is an affiliate of Brivo that has agreed to subscribe for $2.0 million in principal amount of Convertible Debt Notes.

Neither the Convertible Debt Notes nor the New Brivo Class A Common Stock to be issued upon conversion of the Convertible Debt Notes have been registered under the Securities Act in reliance upon the exemption provided in Section 4(a)(2) of the Securities Act.

The Convertible Debt Notes will have a five-year term and will bear interest in the first two years at SOFR+9.25% if paid in cash and SOFR+9.50% if paid in kind.

The interest rate under the Convertible Debt Notes will increase by 1.0% per annum after the first two years.

The Convertible Debt Notes will be issued with an original issue discount of 3.0% of the aggregate principal amount of the Convertible Debt Notes.

The obligation of the subscribers to close the purchase of the Convertible Debt Notes is subject to certain closing conditions, including Crown satisfying the Minimum Unrestricted Cash Condition as defined in the Business Combination Agreement.

The Indenture includes certain covenants, including the requirement that New Brivo maintain at all times after the closing of the Brivo Business Combination, at least $35,000,000 of unrestricted cash and, to the extent a revolving credit facility exists at least $50,000,000 of unrestricted cash on hand together with any unused revolver availability, if any.

In addition, the maximum debt-to-recurring revenue ratio shall be 3.00x starting the first full quarter after Closing, then declining 0.20x per quarter until reaching 1.50x, and remaining flat thereafter.

In connection with the offering of the Convertible Debt Notes, Crown agreed that following the closing of the Brivo Business Combination, an affiliate of Golub Capital LLC (such entity, together with its affiliates, "Golub"), a Convertible Debt Investor, will be entitled to designate one person to attend all meetings of the board of directors and its committees as an observer, subject to certain customary exceptions.

Such right shall exist until the date Golub holds less than $36.5 million aggregate principal amount of Convertible Debt Notes.

The Subscription Agreements provide Convertible Debt Investors with certain registration rights.

In particular, Crown is required to, no later than 45 calendar days after the consummation of the Brivo Business Combination, submit to or file with the SEC a registration statement registering the resale of the shares of New Brivo Class A Common Stock issuable upon conversion of the Convertible Debt Notes.

Additionally, Crown is required to use commercially reasonable efforts to have the registration statement declared effective as soon as practicable after the filing thereof, but no later than the earlier of (i) the 60th calendar day (or 90th calendar day if the SEC notifies Crown that it will “review” the registration statement) following the Closing Date and (ii) the 10th business day after the date Crown is notified (orally or in writing, whichever is earlier) by the SEC that the registration statement will not be “reviewed” or will not be subject to further review.

The registration rights under the Subscription Agreements are separate and distinct from those provided for in the registration rights agreement.

The Convertible Debt Financing is contingent upon, among other things, the closing of the Brivo Business Combination.

Concurrently with the execution of the Business Combination Agreement (but effective as of the closing of the Brivo Business Combination) New Brivo, the sponsor, Anchor Investor and certain other stockholders and directors and officers of Crown and Brivo entered into an amended and restated registration rights agreement (the “Amended and Restated Registration Rights Agreement”), which will terminate and replace the existing registration rights agreement among Crown, sponsor and the Anchor Investor dated February 8, 2021, pursuant to which, among other matters, (i) subject to certain limited exceptions, certain stockholders of Crown and Brivo will be granted certain customary demand and “piggyback” registration rights with respect to their shares of New Brivo Class A Common Stock, (ii) sponsor will be subject to a one-year lock-up period for its shares of New Brivo Class A Common Stock, which lock-up period will terminate early in the event that the closing price of New Brivo Class A Common Stock on the New York Stock Exchange equals or exceeds $12.00 per share for any 20 trading days within any 30 trading day period commencing at least 150 days following the closing of the Brivo Business Combination and (iii) certain stockholders of Brivo will be subject to a 270-day lock-up of their shares of New Brivo Class A Common Stock.

The Restated Registration Rights Agreement provides that New Brivo will file with the SEC within 45 days following the Closing Date, a shelf registration statement pursuant to Rule 415 under the Securities Act registering the resale covering the resale of all the Registrable Securities, as defined in the Registration Rights Agreement, and will use its commercially reasonable efforts to have such shelf registration statement declared effective as soon as practicable after the filing thereof, but no later than 60 days following the filing deadline (the “Effectiveness Deadline”);

provided, that the Effectiveness Deadline shall be extended to 90 days after the filing deadline if the Registration Statement is reviewed by, and the Company receives comments from, the SEC.

The parties to the Registration Rights Agreement will be entitled to make demand registrations in connection with an underwritten shelf takedown offering, in each case subject to certain offering thresholds.

The Amended and Restated Registration Rights Agreement includes customary indemnification and confidentiality provisions.

New Brivo will bear the expenses incurred in connection with the filing of any registration statements filed pursuant to the terms of the Amended and Restated Registration Rights Agreement.

Concurrently with the execution of the Business Combination Agreement, certain stockholders of Brivo entered into that Stockholder Support Agreement with Crown, pursuant to which such stockholders have agreed to, among other things, (i) subject to the applicable Brivo stockholders having previously delivered the Written Consent, vote in favor of the Business Combination Agreement and the transactions contemplated thereby, and (ii) be bound by certain other covenants and agreements related to the Brivo Business Combination.

Shortly after the Business Combination Agreement was entered into certain Brivo stockholders delivered the Written Consent approving certain matters in connection with the Brivo Business Combination.

No further approvals of any Brivo stockholders are required in connection with the Brivo Business Combination.

In connection with the Brivo Business Combination, the sponsor and certain shareholders of Crown that collectively with the sponsor own 6,210,000 Class B ordinary shares of Crown agreed pursuant to that certain sponsor Agreement to, among other things, (i) with limited exceptions, vote in favor of the Business Combination Agreement and the transactions contemplated thereby (including the Mergers) and (ii) waive any adjustment to the conversion ratio set forth in the Existing Governing Documents with respect to all Class B ordinary shares of Crown, in each case, on the terms and subject to the conditions set forth in the sponsor Agreement.

As of the date of the Registration Statement, the sponsor and the other Crown shareholders subject to the voting obligations under the sponsor Agreement collectively own approximately 17.9% of the issued and outstanding ordinary shares.

In addition, the sponsor has agreed that 2,384,000 of the shares of New Brivo Class A Common Stock to be issued to sponsor in the Domestication in respect of the Class B ordinary shares of Crown held by the sponsor as of the date of the sponsor Agreement (such 2,384,000 shares of New Brivo Class A Common Stock, the “Crown Earn-Out Shares”) will be subject to vesting requirements.

The Crown Earn-Out Shares will vest in two equal 1,192,000 tranches based on the achievement of post-Closing share price targets of New Brivo Class A Common Stock of $13.00 and $15.00, respectively, in each case, for any 20 trading days within any 30 trading-day period commencing at any time after the Closing Date and ending on or prior to the fifth anniversary of the Closing Date.

A given achievement metric described above is also achieved if there is a transaction during the relevant period that results in the shares of New Brivo Common Stock being converted into the right to receive cash or other consideration having a per share value (in the case of any non-cash consideration, as provided in the definitive transaction documents for such transaction, or if not so provided, as determined by the New Brivo board of directors in good faith) in excess of the applicable post-Closing share price target set forth above.

The Crown Earn-Out Shares that have not vested by the fifth anniversary of the Closing shall, automatically and without further action on the part of New Brivo or any holder thereof, be forfeited and cancelled for no consideration.

Prior to vesting or forfeiture the Crown Earn-Out Shares will, with limited exceptions, be entitled to all rights of other shares of New Brivo Common Stock.

Results of Operations and Known Trends or Future Events

We have neither engaged in any operations nor generated any revenues to date.

Our only activities since inception have been organizational activities, those necessary to prepare for our initial public offering and identifying a target company for our initial business combination.

Our only activities since inception have been organizational activities, those necessary to prepare for the Initial Public Offering and identifying a target company for our initial business combination.

We do not expect to generate any operating revenues until after completion of our initial business combination.

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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.

For the nine months ended September 30, 2021, we had a net income of $12,035,627.

We incurred $1,121,283 of formation and operating costs consisting mostly of general and administrative expenses, generated income on out trust account for $8,112, expensed a portion of the offering costs associated with the IPO in the amount of $780,268 based on a relative fair value basis, and had a change in fair value of warrant liability of approximately $13,929,066.

For the three months ended September 30, 2021, we had a net income of $3,896,635.

We incurred $513,738 of formation and operating costs consisting mostly of general and administrative expenses, generated income on out trust account for $ 4,240, and had a change in fair value of warrant liability of approximately $4,406,133.

Liquidity and Capital Resources

As of September 30, 2021, we had cash outside the trust account of $277,719 available for working capital needs and working capital of $367,733.

All remaining cash held in the trust account are generally unavailable for the Company’s use, prior to an initial business combination, and is restricted for use either in a business combination or to redeem ordinary shares.

As of September 30, 2021, none of the amount in the trust account was available to be withdrawn as described above.

Through September 30, 2021, the Company’s liquidity needs were satisfied through receipt of $25,000 from the sale of the founder shares, and the remaining net proceeds from the initial public offering and the sale of private placement warrants.

The Company anticipates that the $277,719 outside of the trust account as of September 30, 2021, will be sufficient to allow the Company to operate for at least the next 12 months, assuming that a business combination is not consummated during that time.

Until consummation of our business combination, the Company will be using the funds not held in the trust account, and any additional Working Capital Loans (as defined in Note 5 to our financial statements) from the initial shareholders, the Company’s officers and directors, or their respective affiliates (which is described in Note 5 to our financial statements), for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the business combination.

The Company does not believe it will need to raise additional funds in order to meet the expenditures required for operating its business.

However, if the Company’s estimates of the costs of undertaking in-depth due diligence and negotiating business combination is less than the actual amount necessary to do so, the Company may have insufficient funds available to operate its business prior to the business combination.

Moreover, the Company will need to raise additional capital through loans from its sponsor, officers, directors, or third parties.

None of the sponsor, officers or directors are under any obligation to advance funds to, or to invest in, the Company.

If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of its business plan, and reducing overhead expenses.

The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all.

Derivative Warrant Liabilities

We do not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks.

We evaluate all of our financial instruments, including issued share purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and ASC 815-15.

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period.

We issued an aggregate of 14,213,333 warrants in connection with our initial public offering and private placement, which, are recognized as derivative liabilities in accordance with ASC 815-40.

Accordingly, we recognize the warrants as liabilities at fair value and adjust the instruments to fair value at each reporting period.

The liabilities are subject to remeasurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s statement of operations.

Contractual Obligations

We do not have any long-term debt obligations, capital lease obligations, operating lease obligations, purchase obligations or long-term liabilities.

For the three months ended March 31, 2022, we had a net income of $3,356,489.

We incurred $1,290,202 of operating costs consisting mostly of legal fees, generated income on our trust account for $22,526, and had a change in fair value of warrant liability of $4,548,267.

For the three months ended March 31, 2021, we had a net income of $9,611,289.

We incurred $126,309 of formation and operating costs consisting mostly of general and administrative expenses, expensed a portion of the offering costs associated with the Initial Public Offering in the amount of $780,268 based on a relative fair value basis and had a change in fair value of warrant liability of $10,517,866.

Liquidity, Capital Resources and Going Concern

On February 11, 2021, we consummated our Initial Public Offering of 27,600,000 Units, at a price of $10.00 per Unit, which included the exercise of the underwriters’ option to purchase an additional 3,600,000 Units at the Initial Public Offering price to cover over-allotments.

The Units were sold, generating gross proceeds of $276,000,000.

Substantially concurrently with the closing of the Initial Public Offering, we completed the private sale of 5,013,333 Private Placement Warrants to our sponsor and the Anchor Investor at a purchase price of $1.50 per Private Placement Warrant, generating gross proceeds to the Company of $7,520,000.

Following the Initial Public Offering, the sale of the Private Placement Warrants, and the underwriters election to fully exercise their over-allotment option, a total of $276,000,000 was placed in the trust account at J.P.

Morgan Chase Bank, N.A., maintained by Continental Stock Transfer & Trust Company, acting as trustee, and we had $1,919,091 of cash held outside of the trust account, after payment of costs related to the Initial Public Offering, and available for working capital purposes.

We incurred $16,505,915 in transaction costs, including $5,520,000 of underwriting fees, $9,660,000 of deferred underwriting fees, $795,825 of excess fair value of the Anchor Investor shares and $530,090 of other offering costs.

For the three months ended March 31, 2022, cash used in operating activities was $23,696, resulting primarily from the net income of $3,356,489 which was impacted by unrealized gain on change in fair value of warrant liabilities of $4,548,267 and trust dividend income of $22,526 and offset by changes in operating assets and liabilities used $1,238,000 of cash from operating activities.

As of March 31, 2022 and December 31, 2021, we had cash outside the trust account of $38,503 and $14,807 available for working capital needs and working capital deficit of $5,305,550 and $4,091,246, respectively.

All remaining cash held in the trust account is generally unavailable for our use, prior to an initial business combination, and is restricted for use either in a business combination or to redeem ordinary shares.

As of March 31, 2022 and December 31, 2021, none of the amount in the trust account was available to be withdrawn as described above.

Through March 31, 2022, our liquidity needs were satisfied through receipt of $25,000 from the sale of the Founder Shares, the remaining net proceeds from the Initial Public Offering, the sale of Private Placement Warrants, the Promissory Note and the Convertible Note (as defined below).

On October 13, 2020, the Company issued a promissory note to the Sponsor, pursuant to which the Company may borrow up to an aggregate principal amount of $300,000 (the “Promissory Note”).

The Promissory Note is non-interest bearing and payable on the earlier of (i) December 31, 2021 or (ii) the completion of the IPO.

On February 11, 2021, the Company had repaid the Promissory Note in full.

After the Initial Public Offering, no future borrowings are permitted under this Promissory Note.

On November 30, 2021, we entered into a convertible note with Richard Chera, our Chief Executive Officer and Director, pursuant to which Mr.

Chera agreed to loan us up to an aggregate principal amount of $1,500,000 (the “Convertible Note”).

The Convertible Note is non-interest bearing and due on the earlier of:

(i) 12 months from the date thereof or (ii) the date on which we consummate a business combination.

If we do not consummate a business combination, we may use a portion of any funds held outside the trust account to repay the Convertible Note;

however, no proceeds from the trust account may be used for such repayment if we do not consummate a business combination.

Up to $1,500,000 of the Convertible Note may be converted into warrants at a price of $1.50 per warrant at the option of Mr.

The warrants would be identical to the Private Placement Warrants.

As of March 31, 2022, the outstanding balance under the Convertible Note amounted to an aggregate of $450,000.

We anticipate that the $38,503 outside of the trust account as of March 31, 2022, and the amount available under the Convertible Note will be sufficient liquidity to allow the Company to operate until it consummates the proposed Brivo Business Combination and the related funding from the Subscription Agreements.

In connection with our assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” we have determined that the mandatory liquidation and subsequent dissolution, should we be unable to complete a business combination, raises substantial doubt about our ability to continue as a going concern.

We have until February 2023 to consummate a business combination.

If a business combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution.

Commitments and Contingencies

Registration Rights

The holders of the founder shares, Private Placement Warrants and any warrants that may be issued upon conversion of working capital loans (and any ordinary shares issuable upon the exercise of the Private Placement Warrants or warrants issued upon conversion of the working capital loans and upon conversion of the founder shares) are entitled to registration rights pursuant to a registration rights agreement signed prior to the effective date of the Initial Public offering requiring the Company to register such securities for resale.

The holders of these securities will be entitled to make up to three demands, excluding short form demands, that the Company register such securities.

In addition, the holders have certain “piggyback” 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.

On November 10, 2021 (but effective as of the closing of the Brivo Business Combination), and as part of the Brivo Business Combination, New Brivo, the sponsor, Anchor Investor and certain other stockholders and directors and officers of Crown and Brivo entered into the Amended and Restated Registration Rights Agreement.

Underwriting Agreement

On February 11, 2021, the Company paid a fixed underwriting discount of $0.20 per Unit, or $5,520,000 in the aggregate.

Additionally, a deferred underwriting discount of $0.35 per Unit, or $9,660,000 in the aggregate, will be payable to the underwriters from the amounts held in the trust account solely in the event that the Company completes an initial business combination, subject to the terms of the underwriting agreement.

Lease Agreement

We have an agreement to pay the sponsor or an affiliate thereof a total of up to $15,000 per month for office space, utilities, secretarial and administrative support services provided to members of our management team.

As of March 31, 2022, we have not made any payments pursuant to the administrative agreement and do not expect to incur any related expenses in the near future.

Attorney Fees

We have incurred business combination related legal fees, none of which are payable until consummation of the proposed Brivo Business Combination.

As of March 31, 2022 total fees incurred amounted to approximately $5.7 million.

Of the total legal fees, 20% or approximately $1.1 million are contingent upon consummation of a business combination.

If we are unable to complete a business combination within the Combination Period, no funds held in the trust account may be used to settle any balance due.

We continue to incur business combination related legal fees and the ultimate amount of such payments will be quantified at or near the time of closing.

Convertible Note

On November 30, 2021, we entered into a convertible note with Richard Chera, our Chief Executive Officer and Director, pursuant to which Mr.

Chera agreed to loan us up to an aggregate principal amount of $1,500,000.

See “ Liquidity and Capital Resources .”

Contractual Obligation

We do not have any long-term debt obligations, capital lease obligations, operating lease obligations, purchase obligations or long-term liabilities other than described above.

Critical Accounting Policies

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Actual results may differ from these estimates under different assumptions or conditions.

There have been no significant changes in our critical accounting policies as discussed in the Form 8-K and the final prospectus filed by us with the SEC on March 25, 2021 and February 18, 2021, respectively.

Correction of an Error in Previously Furnished Financial Statements

In our previously issued financial statements, a portion of the public shares were classified as permanent equity to maintain stockholders' equity greater than $5,000,000 on the basis that we will consummate an initial business combination only if the Company has net tangible assets of at least $5,000,001.

Thus, we can only complete a merger and continue to exist as a public company if there is sufficient Public Shares that do not redeem at the merger and so it is appropriate to classify the portion of its public shares required to keep stockholders' equity above the $5,000,000 threshold as "shares not subject to redemption."

However, in light of recent comment letters issued by the Securities & Exchange Commission ("SEC") to several special purpose acquisition companies, we re-evaluated our application of ASC 480-10-99 to accounting classification of public shares.

Upon re-evaluation, we determined that the public shares include certain provisions that require classification of the public shares as temporary equity regardless of the minimum net tangible asset required by the Company to complete its initial business combination.

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;"

we evaluated the changes and have determined that the related impacts were not material to any previously presented financial statements.

Therefore, we, in consultation with our Audit Committee, concluded that our previously issued financial statements impacted should be revised to report all public shares as temporary equity.

As such we are revising those periods in this Quarterly Report.

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 Topic 480 "Distinguishing Liabilities from Equity."

Class A ordinary shares subject to mandatory redemption (if any) are classified as a liability instrument and are measured at fair value.

The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Class A ordinary shares subject to mandatory redemption (if any) are classified as a liability instrument and are measured at fair value.

Conditionally redeemable ordinary shares (including ordinary shares that feature 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.

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The Company’s Class A ordinary 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, 27,600,000 shares of 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 balance sheet.

Accordingly, as of March 31, 2022, 27,600,000 shares of 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 balance sheet.

Net Loss per Ordinary Shares

Net loss per Class A ordinary share is computed by dividing net loss by the weighted average number of ordinary shares outstanding for the period.

The Company applies the two-class method in calculating earnings per share.

Shares of Class A ordinary shares subject to possible redemption at September 30, 2021, which are not currently redeemable and are not redeemable at fair value, have been excluded from the calculation of basic net loss per Class A ordinary shares since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings.

The Company has not considered the effect of Warrants sold in the Initial Public Offering and the Private Placement to purchase an aggregate 14,213,333 Class A ordinary shares in the calculation of diluted loss per share, since the exercise of the Warrants into Class A ordinary shares is contingent upon the occurrence of future events.

As a result, diluted net loss per Class A ordinary share is the same as basic net loss per Class A ordinary share for the period presented.

We have two classes of shares, which are referred to as Class A ordinary shares and Class B ordinary shares.

Earnings and losses are shared pro rata between the two classes of shares.

The 14,213,333 potential ordinary shares for outstanding warrants to purchase our shares were excluded from diluted earnings per share for the three months ended March 31, 2022 because the warrants are contingently exercisable, and the contingencies have not yet been met.

As a result, diluted net income per ordinary share is the same as basic net income per ordinary share for the periods presented.

Anchor Investors

The Company complies with SAB Topic 5.A to account for the valuation of the founder shares acquired by the Anchor Investors.

The founder shares purchased by the Anchor Investors represent a capital contribution for the benefit of the Company and are recorded as offering costs and reflected as a reduction in the proceeds from the offering and offering expenses in accordance with ASC 470 and Staff Accounting Bulletin Topic 5A.

As such, upon sale of 690,000 founder shares to the Anchor Investors the valuation of these shares were recognized as a deferred offering cost and charged to temporary equity and other expenses.

At February 11, 2021, the fair value of the founder shares to the Anchor Investors in excess of the amount paid was $795,825.

Recent Accounting Pronouncements

August 2020, the FASB issued Accounting Standards Update ("ASU") 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40) ("ASU 2020-06") to simplify accounting for certain financial instruments.

In August 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments.

ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity.

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ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments.

ASU 2020-06 is effective January 1, 2022 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021.

The Company is currently assessing the impact, if any, that ASU 2020-06 would have on its financial position, results of operations or cash flows.

Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company's financial statements.

We adopted ASU 2020-06 on January 1, 2022 and the standard was applied on a full retrospective basis.

There was no material impact on our financial position, results of operations or cash flows.

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

Off-Balance Sheet Arrangements

As of September 30, 2021, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.

As of March 31, 2022, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.

The Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) contains provisions that, among other things, relax certain reporting requirements for qualifying public companies.

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These exemptions will apply for a period of five years following the completion of our Initial Public Offering or until we are no longer an “emerging growth company,” whichever is earlier.

Quantitative and Qualitative Disclosures About Market Risk

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis