UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2021
Or
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from__________ to ___________

Commission File Number 001-39700

Kingswood Acquisition Corp.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	85-2432410
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

17 Battery Place, Room 625 New York, NY 10004	10004
(Address of Principal Executive Offices)	(Zip Code)

(212) 404-7002

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Units, each consisting of one share of Class A common stock and three-fourths of one redeemable warrant	KWAC.U	New York Stock Exchange
Class A common stock, par value $0.0001 per share	KWAC	New York Stock Exchange
Warrants, each whole warrant exercisable for one share of Class A common stock, each at an exercise price of $11.50 per share	KWAC WS	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

	Large accelerated filer ☐			Accelerated filer ☐
	Non-accelerated filer ☒			Smaller reporting company ☒
	Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒ No ☐

As of June 30, 2021, there were 11,604,000 shares of the registrant’s Class A common stock, par value $0.0001 per share, and 2,875,000 shares of the registrant’s Class B common stock, par value $0.0001 per share, outstanding.

		Page

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements	3

	Condensed Balance Sheets as of June 30, 2021 (Unaudited) and December 31, 2020	3

	Condensed Statements of Operations for the three and six months ended June 30, 2021 (Unaudited)	4

	Condensed Statements of Changes in Shareholders’ Equity for the three and six months ended June 30, 2021 (Unaudited)	4

	Condensed Statement of Cash Flows for the six months ended June 30, 2021 (Unaudited)	5

	Notes to Unaudited Condensed Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	22

Item 4.	Controls and Procedures	23

PART II. OTHER INFORMATION		23

Item 1.	Legal Proceedings	23

Item 1A.	Risk Factors	23

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24

Item 3.	Defaults Upon Senior Securities	24

Item 4.	Mine Safety Disclosures	24

Item 5.	Other Information	24

Item 6.	Exhibits	25

	Signatures	26


	June 30, 2021		December 31, 2020
	(Unaudited)
Assets
Cash and cash equivalents	$	1,191,956	$	1,457,839
Prepaid expense		153,890		292,740
Total current assets		1,345,846		1,750,579
Prepaid expense, non-current		58,356		—
Investment held in Trust Account		117,855,589		117,849,745
Total Assets	$	119,259,791	$	119,600,324

Liabilities and Stockholders’ Equity
Accounts payable	$	440,328	$	79,617
Due to related party		1,667		1,667
Total current liabilities		441,995		81,284
Deferred Underwriters’ Discount		4,025,000		4,025,000
Warrant liability		10,760,376		7,202,334
Total liabilities		15,227,371		11,308,618

Commitments
Class A Common Stock subject to possible redemption, 9,661,699 shares and 10,077,239 shares at redemption value at June 30, 2021 and December 31, 2020, respectively		99,032,412		103,291,697

Stockholders’ Equity:
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding		—		—
Class A common stock, $0.0001 par value; 100,000,000 shares authorized; 1,942,301 shares and 1,526,761 shares issued and outstanding, excluding 9,661,699 shares and 10,077,239 shares subject to possible redemption at June 30, 2021 and December 31, 2020, respectively		195		153
Class B common stock, $0.0001 par value; 10,000,000 shares authorized; 2,875,000 shares issued and outstanding		288		288
Additional paid-in capital		9,810,307		5,792,155
Accumulated deficit		(4,810,782)		(792,587)
Total stockholders’ equity		5,000,008		5,000,009
Total Liabilities and Stockholders’ Equity	$	119,259,791	$	119,600,324


	For the Three		For the Six
	Months Ended		Months Ended
	June 30, 2021		June 30, 2021
Operating costs	$	257,346	$	457,848
Loss from operations		(257,346)		(457,848)

Other income/(expense):
Interest Income		2,971		5,906
Transaction costs		—		(8,211)
Change in fair value of warrant liabilities		(2,515,778)		(3,558,042)
Total other expense		(2,512,807)		(3,560,347)

Net loss	$	(2,770,153)	$	(4,018,195)

Basic and diluted weighted average shares outstanding, Class A common stock, subject to possible redemption		9,931,958		10,202,217
Basic and diluted net income per share	$	—	$	—
Basic and diluted weighted average shares outstanding, common stock		4,817,301		4,276,783
Basic and diluted net loss per share	$	(0.58)	$	(0.94)


	Class A Common Stock		Class B Common Stock		Additional	Accumulated	Stockholders’
	Shares	Amount	Shares	Amount	Paid-in Capital	Deficit	Equity
Balance- January 1, 2021	1,526,761	153	2,875,000	288	5,792,155	(792,587)	5,000,009
Offering costs	—	—	—	—	(241,091)	—	(241,091)
Change in value of Class A common stock subject to possible redemption	415,540	42	—	—	4,259,243	—	4,259,285
Net Loss	—	—	—	—	—	(4,018,195)	(4,018,195)
Balance as of June 30, 2021	1,942,301	195	2,875,000	288	9,810,307	(4,810,782)	5,000,008

Balance as of March 31, 2021	1,672,042	168	2,875,000	288	7,040,179	(2,040,629)	5,000,006
Change in value of Class A common stock subject to possible redemption	270,259	27	—	—	2,770,128	—	2,770,155
Net Loss	—	—	—	—	—	(2,770,153)	(2,770,153)
Balance as of June 30, 2021	1,942,301	195	2,875,000	288	9,810,307	(4,810,782)	5,000,008


	For the six months ended
	June 30, 2021
Cash flows from operating activities:
Net loss	$	(4,018,195)
Adjustments to reconcile net loss to net cash used in operating activities:
Interest earned on cash held in Trust Account		(5,844)
Change in fair value of warrant liabilities		3,558,042
Transaction costs		8,211
Changes in working capital:		—
Prepaid expenses		80,494
Accounts payable and accrued expenses		111,409
Net cash used in operating activities		(265,883)

Net change in cash		(265,883)
Cash, beginning of the period		1,457,839
Cash, end of period	$	1,191,956
Supplemental disclosure of cash flow information:
Non-cash investing and financing transactions:
Initial classification of Class A common stock subject to possible redemption	$	103,291,697
Change in value of common stock subject to possible redemption	$	(4,259,285)
Accrued deferred offering costs	$	249,302


	For the Three Months Ended		For the Six Months Ended
	June 30, 2021		June 30, 2021
Redeemable Class A Common Stock
Numerator: Earnings allocable to Redeemable Class A Common Stock
Interest Income	$	2,523	$	5,035
Less: interest available to be withdrawn for payment of taxes	$	(2,523)	$	(5,035)
Net income allocable to Class A common stock subject to possible redemption	$	—	$	—
Denominator: Weighted Average Redeemable Class A Common Stock
Redeemable Class A Common Stock, Basic and Diluted		9,931,958		10,202,217
Earnings/Basic and Diluted Redeemable Class A Common Stock	$	0.00	$	0.00

Non-Redeemable Class B Common Stock
Numerator: Earnings allocable to non-redeemable Class B Common Stock
Net Loss	$	(2,770,153)	$	(4,018,195)
Redeemable Net Earnings	$	—	$	—
Non-Redeemable Net Loss	$	(2,770,153)	$	(4,018,195)
Denominator: Weighted Average Non-Redeemable Class B Common Stock
Non-Redeemable Class B Common Stock, Basic and Diluted		4,817,301		4,276,783
Loss/Basic and Diluted Non-Redeemable Common Stock	$	(0.58)	$	(0.94)


	June 30, 2021
			(Level 1)		(Level 2)		(Level 3)
Assets:
U.S. Mutual Funds held in Trust Account⁽¹⁾	$	117,855,589	$	117,855,589	$	—	$	—

Liabilities:
Private Placement Warrants	$	4,722,876	$	—	$	—	$	4,722,876
Public Warrants	$	6,037,500	$	6,037,500	$	—		—


	December 31,			June 30,
Input	2020			2021
Stock price	$	10.00		$	10.03
Exercise price	$	11.50		$	11.50
Term (years)		5.0			5.0
Risk free rate		0.36	%		0.87	%
Dividend yield		0.0	%		0.0	%
Volatility		13.0	%		15.0	%


Fair value at December 31, 2020	$	7,202,334
Public Warrants reclassified to level 1⁽¹⁾		(4,571,250)
Change in fair value		2,091,792
Fair Value at June 30, 2021	$	4,722,876

Exhibit No.		Description
31.1*		Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934
32.1**		Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS*		XBRL Instance Document
101.SCH*		XBRL Taxonomy Extension Schema Document
101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document

	KINGSWOOD ACQUISITION CORP.

Date: August 13, 2021	By:	/s/ Michael Nessim
		Name: Michael Nessim
		Title: Chief Executive Officer
		(Principal Financial Officer)

SEC Form 10-Q filed by Kingswood Acquisition Corp.