UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 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, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-40845

Parabellum Acquisition Corp.

(Exact Name of Registrant as Specified in its Charter)


Delaware		86-2219674
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
3811 Turtle Creek Blvd., Suite 2125 Dallas, TX		75219
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (972)591-8349

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, $0.0001 par value, and three-quarters of one redeemable warrant	PRBM.U	The New York Stock Exchange
Class A common stock, par value $0.0001 per share	PRBM	The New York Stock Exchange
Redeemable warrants, each full warrant exercisable for one share of Class A common stock at an exercise price of $11.50 per share	PRBM.WS	The 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, 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 August 12, 2022, 14,375,000 shares of Class A common stock, par value $0.0001 per share, and 3,593,750 shares of Class B common stock, par value $0.0001 per share, were issued and outstanding.

Table of Contents

PARABELLUM ACQUISITION CORP.
Quarterly Report on Form 10-Q
Table of Contents


		Page
PART I. FINANCIAL INFORMATION
Item 1.	Condensed Financial Statements	1
	Condensed Balance Sheets as of June 30, 2022 (unaudited) and December 31, 2021	1
	Condensed Statements of Operations (unaudited)	2
	Condensed Statements of Stockholders’ Equity (Deficit) (unaudited)	3
	Condensed Statements of Cash Flows (unaudited)	4
	Notes to Condensed Financial Statements (unaudited)	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4.	Controls and Procedures	24
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 3.	Defaults Upon Senior Securities	26
Item 4.	Mine Safety Disclosures	26
Item 5.	Other Information	26
Item 6.	Exhibits	27
Signatures		28

Table of Contents

PART I-FINANCIAL INFORMATION

Item 1. Financial Statements.

PARABELLUM ACQUISITION CORP.

Condensed Balance Sheets


	June 30, 2022		December 31, 2021
	(unaudited)
Assets
Current assets:
Cash	$	613,599		1,105,214
Prepaid expenses		311,985		429,347
Total current assets		925,584		1,534,561

Prepaid expenses, noncurrent		—		99,346
Operating right-of-use assets		46,892		—
Marketable securities held in trust account		145,447,559		145,201,023
Total assets	$	146,420,035		146,834,930

Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable and accrued expenses	$	314,576		254,112
Accrued offering costs		85,000		272,830
Operating lease liabilities		49,913		—
Income taxes payable		75,808		—
Deferred rent		—		4,134
Total current liabilities		525,297		531,076
Warrant liability		2,259,562		7,821,563
Deferred underwriting fees payable		5,031,250		5,031,250
Total liabilities		7,816,109		13,383,889

Commitments and Contingencies (Note 8)

Class A common stock, $0.0001 par value; 100,000,000 shares authorized; 14,375,000 shares subject to possible redemption issued and outstanding at a redemption value		145,227,260		145,201,023

Stockholders’ Deficit:
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding		—		—
Class B common stock, $0.0001 par value; 10,000,000 shares authorized; 3,593,750 shares issued and outstanding		359		359
Accumulated deficit		(6,623,693)		(11,750,341)

Total Stockholders’ Deficit		(6,623,334)		(11,749,982)

Total Liabilities and Stockholders’ Deficit	$	146,420,035		146,834,930

The accompanying notes are an integral part of these unaudited condensed financial statements.

Table of Contents

PARABELLUM ACQUISITION CORP.

Condensed Statements of Operations

(Unaudited)


							For the period
							from
							February 5, 2021
					For the six		(inception)
	For the three months ended				months ended		through
	June 30,				June 30,		June 30,
	2022		2021		2022		2021
General and administrative expenses	$	284,724	$	—	$	579,844	$	10,000
Loss from operations		(284,724)		—		(579,844)		(10,000)
Other income:
Change in fair value of warrant liability		1,738,126		—		5,562,001		—
Dividend and interest income		220,299		—		246,536		—
Total other income		1,958,425		—		5,808,537		—

Income (loss) before income taxes		1,673,701		—		5,228,693		(10,000)

Income tax provision		(75,808)		—		(75,808)		—

Net income (loss)	$	1,597,893	$	—	$	5,152,885	$	(10,000)

Weighted average shares outstanding of Class A common stock subject to possible redemption - basic and diluted		14,375,000		—		14,375,000		—

Basic and diluted net income (loss) per share, Class A common stock subject to possible redemption (see Note 2)	$	0.09	$	(0.00)	$	0.29	$	(0.00)

Weighted average shares outstanding of Class B common stock - basic and diluted		3,593,750		3,125,000		3,593,750		3,125,000

Basic and diluted net income (loss) per share, Class B common stock (see Note 2)	$	0.09	$	(0.00)	$	0.29	$	(0.00)

The accompanying notes are an integral part of these unaudited condensed financial statements.

Table of Contents

PARABELLUM ACQUISITION CORP.

Condensed Statements of Stockholders’ Equity (Deficit)

For the three months and six months ended June 30, 2022 and

for the period from February 5,2021 (inception) through June 30, 2021

(unaudited)


	Common Stock Subject to Possible
	Redemption			Common Stock			Additional				Total
	Class A			Class B			Paid-in		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Capital		Deficit		Deficit
Balance – January 1, 2022	14,375,000	$	145,201,023	3,593,750	$	359	$	—	$	(11,750,341)	$	(11,749,982)
Accretion to redemption value of Class A common stock subject to possible redemption	—		26,237	—		—		—		(26,237)		(26,237)
Net income	—		—	—		—		—		3,554,992		3,554,992
Balance - March 31, 2022	14,375,000		145,227,260	3,593,750		359		—		(8,221,586)		(8,221,227)
Net income	—		—	—		—		—		1,597,893		1,597,893
Balance — June 30, 2022	14,375,000	$	145,227,260	3,593,750	$	359		—	$	(6,623,693)	$	(6,623,334)


	Common Stock Subject to Possible
	Redemption			Common Stock			Additional				Total
	Class A			Class B			Paid-in		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Capital		Deficit		Equity
Balance – February 5, 2021 (inception)	—	$	—	—	$	—	$	—	$	—	$	—
Class B common stock issued to Sponsor	—		—	3,593,750		359		24,641		—		25,000
Net loss	—		—	—		—		—		(10,000)		(10,000)
Balance - March 31, 2021	—		—	3,593,750		359		24,641		(10,000)		15,000
Net loss	—		—	—		—		—		—		—
Balance – June 30, 2021	—	$	—	3,593,750	$	359	$	24,641	$	(10,000)	$	15,000

The accompanying notes are an integral part of these unaudited condensed financial statements.

Table of Contents

PARABELLUM ACQUISITION CORP.

Condensed Statements of Cash Flows

(Unaudited)


			For the period from
			February 5, 2021
	For the six		(inception)
	months ended		through
	June 30, 2022		June 30, 2021
Cash Flows from Operating Activities:
Net income (loss)	$	5,152,885	$	(10,000)
Adjustments to reconcile net income (loss) to net cash used in operating activities
Change in fair value of warrant liability		(5,562,001)		—
Dividend and interest income earned in trust account		(246,536)		—
Amortization of operating right of use assets		25,115		—
Changes in current assets and liabilities:
Prepaid expenses		216,708		—
Accounts payable and accrued expenses		60,464		—
Operating lease liabilities		(26,228)		—
Income taxes payable		75,808		—
Net cash used in operating activities		(303,785)		(10,000)

Cash Flows from Financing Activities:
Proceeds from issuance of Promissory Note – related party		—		100,000
Proceeds from sale of Class B common stock to Sponsor		—		25,000
Payment of offering costs		(187,830)		(98,348)
Net cash (used in) provided by financing activities		(187,830)		26,652

Net Change in Cash		(491,615)		16,652
Cash – beginning of period		1,105,214		—
Cash – end of period	$	613,599	$	16,652

Supplemental Disclosure of cash flow information:
Offering costs included in accrued offering costs	$	—	$	331,211
Accretion of the dividends and interest earned in trust account	$	26,237	$	—
Right-of-use asset acquired through operating lease upon adoption of ASC 842	$	72,007	$	—

The accompanying notes are an integral part of these unaudited condensed financial statements.

Table of Contents

PARABELLUM ACQUISITION CORP.

Notes to Unaudited Condensed Financial Statements

(unaudited)

1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

Organization and General

Parabellum Acquisition Corp. (the “Company”) is a blank check company incorporated in the state of Delaware on February 5, 2021. The Company was formed for the purpose of effectuating a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses (the “Business Combination”). 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 June 30, 2022, the Company had not yet commenced operations. All activity for the period from February 5, 2021 (inception) through June 30, 2022 relates to the Company’s formation, the initial public offering (the “Initial Public Offering”) and activities necessary to identify a potential target for a Business Combination. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering. The Company has selected December 31 as its fiscal year end.

The registration statement for the Company’s Initial Public Offering was declared effective on September 27, 2021. On September 30, 2021, the Company consummated the Initial Public Offering of 12,500,000 units (the “Units” and, with respect to the Class A common stock included in the Units being offered, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $125,000,000, which i

SEC Form 10-Q filed by Parabellum Acquisition Corp.