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~~March 31, 2022

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

For the transition period from to

Commission File No. 001-39850

KL Acquisition Corp

(Exact name of registrant as specified in its charter)

Delaware

85-2734828

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

111 West 33rd Street, Suite 1910

New York, NY 10120

(Address of Principal Executive Offices, including zip code)

(212) 782-3482

(Registrant’s telephone number, including area code)

N/A

(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, $0.0001 par value, and one-third of one redeemable warrant	KLAQU	The Nasdaq Stock Market LLC
Class A common stock included as part of the units	KLAQ	The Nasdaq Stock Market LLC
Redeemable warrants included as part of the units	KLAQW	The Nasdaq Stock Market LLC

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 ~~August 19, 2021,~~May 23, 2022, there were 28,750,000 shares of Class A common stock, par value $0.0001 per share (the “Class A common stock”) and 7,187,500 shares of the company’s Class B common stock, par value $0.0001 per share (the “Class B common stock”), of the registrant issued and outstanding.

Table of Contents

KL ACQUISITION CORP

FORM 10-Q FOR THE QUARTER ENDED ~~JUNE 30, 2021~~MARCH 31, 2022

TABLE OF CONTENTS


		Page
PART 1 – FINANCIAL INFORMATION

Item 1.	Financial Statements	3

	Condensed Balance Sheets as of ~~June 30, 2021~~March 31, 2022 (Unaudited) and December 31, ~~2020~~2021 (Audited)	3

	Condensed Statements of Operations for the Three Months ~~and Six Months~~ Ended ~~June 30,~~March 31, 2022 and 2021 (Unaudited)	4

	Condensed ~~Statement~~Statements of Changes in Stockholders’ ~~Equity~~Deficit for the ~~Six~~Three Months Ended ~~June 30,~~March 31, 2022 and 2021 (Unaudited)	5

	Condensed ~~Statement~~Statements of Cash Flows for the ~~Six~~Three Months Ended ~~June 30,~~March 31, 2022 and 2021 (Unaudited)	6

	Notes to Condensed Financial Statements (Unaudited)	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2021

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	2223

Item 4.	Controls and Procedures	2324

PART II – OTHER INFORMATION		2425

Item 1.	Legal Proceedings	2425

Item 1A.	Risk Factors	2425

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2425

Item 3.	Defaults Upon Senior Securities	2425

Item 4.	Mine Safety Disclosures	2425

Item 5.	Other Information	2425

Item 6.	Exhibits	2527

SIGNATURES		2628

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1. Financial ~~Statements~~Statements.

KL ACQUISITION CORP

CONDENSED BALANCE SHEETS


	June 30, 2021		December 31, 2020		March 31, 2022		December 31, 2021
	(Unaudited)				(Unaudited)
Assets
Current assets:
Cash	$	720,200	$	—	$	185,667	$	549,993
Prepaid expenses		347,481		—		283,310		300,000
Deferred offering costs associated with IPO		—		408,197
Total current assets		1,067,681		408,197		468,977		849,993
Cash Held in Trust account		287,559,908		—

Investments held in Trust Account						287,598,643		287,569,685
Other non-current assets		156,164		—		—		4,932
Total assets	$	288,783,753	$	408,197	$	288,067,620	$	288,424,610

Liabilities and Stockholders’ Equity (Deficit)
Liabilities, Redeemable Common Stock and Stockholders’ Deficit
Current liabilities:
Accounts payable and accrued expenses	$	281,028	$	231,809	$	83,158	$	123,116
Franchise tax payable		100,000		71,289		50,000		144,294
Sponsor loans		—		152,031
Total current liabilities		381,028		455,129		133,158		267,410

Warrant Liabilities		13,846,266		—		3,463,195		7,830,794
Deferred underwriters’ discount		10,062,500		—		10,062,500		10,062,500
Total liabilities		24,289,794		455,129		13,658,853		18,160,704

Commitments
Commitments and Contingencies (Note 6)

Common stock subject to possible redemption, 25,949,396 shares at redemption value		259,493,958		—
Common stock subject to possible redemption, 28,750,000 shares at redemption value as of March 31, 2022 and December 31, 2021						287,500,000		287,500,000

Stockholders’ equity (deficit):
Stockholders’ deficit:
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; NaN issued and outstanding		—		—		—		—
Class A common stock, $0.0001 par value; 200,000,000 shares authorized; 2,800,604 shares (excluding 25,949,396 shares subject to possible redemption) and 0 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively		279		—
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 7,187,500 shares issued and outstanding		719		719
Class A common stock, $0.0001 par value; 200,000,000 shares authorized						—		—
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 7,187,500 shares issued and outstanding as of March 31, 2022 and December 31, 2021						719		719
Additional paid-in capital		4,667,226		24,281		—		—
Retained earnings (Accumulated Deficit)		331,777		(71,932)
Total stockholders’ equity (deficit)		5,000,001		(46,932)
Total liabilities and stockholders’ equity (deficit)	$	288,783,753	$	408,197
Accumulated deficit						(13,091,952)		(17,236,813)
Total stockholders’ deficit						(13,091,233)		(17,236,094)
Total liabilities, redeemable common stock and stockholders’ deficit					$	288,067,620	$	288,424,610

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

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KL ACQUISITION CORP

CONDENSED ~~STATEMENT~~STATEMENTS OF OPERATIONS

~~FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2021~~

(Unaudited)


	For the		For the
	three months ended		six months ended		Three Months Ended
	June 30,		June 30,		March 31,
	2021		2021		2022		2021
Formation and operating costs	$	488,900	$	577,754	$	251,696	$	88,854
Loss from operations		(488,900)		(577,754)		(251,696)		(88,854)

Other Income (Expense)
Interest on cash held in trust account		16,052		59,908
Change in fair value of warrant liabilities		(4,194,429)		5,343,573
Offering expenses related to warrant issuance		—		(701,643)
Total other income (expense)		(4,178,377)		4,701,838
Other income (expense)
Interest income earned on Trust						28,958		43,856
Unrealized gain on change in fair value of warrants						4,367,599		9,538,002
Warrant issuance costs						—		(701,643)
Total other income						4,396,557		8,880,215

Net (loss) income	$	(4,667,277)	$	4,124,084
Net income					$	4,144,861	$	8,791,361

Weighted average shares outstanding, Class A common stock subject to possible redemption		26,410,994		25,985,664
Basic and diluted net income per share, Class A common stock subject to possible redemption	$	—	$	—
Weighted average shares outstanding, Non-redeemable common stock		9,526,506		9,783,838
Basic and diluted net (loss) income per share, Non-redeemable	$	(0.49)	$	0.42
Weighted average shares outstanding of Class A common stock						28,750,000		25,236,111
Basic and diluted net income per share, Class A common stock					$	0.12	$	0.27
Weighted average shares outstanding of Class B common stock						7,187,500		7,187,500
Basic and diluted net income per share, Class B common stock					$	0.12	$	0.27

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

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KL ACQUISITION CORP

CONDENSED ~~STATEMENT~~STATEMENTS OF CHANGES IN STOCKHOLDERS’ ~~EQUITY~~DEFICIT

~~FOR THE SIX MONTH~~S(Unaudited)

THREE MONTHS ENDED ~~June 30,~~MARCH 31, 2022


	Common Stock						Additional				Total
	Class A			Class B			Paid-In		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Capital		Deficit		Deficit
Balance as of January 1, 2022	—	$	—	7,187,500	$	719	$	—	$	(17,236,813)	$	(17,236,094)

Net income	—		—	—		—		—		4,144,861		4,144,861

Balance as of March 31, 2022	—	$	—	7,187,500	$	719	$	—	$	(13,091,952)	$	(13,091,233)

THREE MONTHS ENDED MARCH 31, 2021


	Common Stock						Additional		Retained Earnings		Total
	Class A			Class B			Paid-In		(Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Capital		Deficit)		Deficit
Balance as of January 1, 2021	0	$	0	7,187,500	$	719	$	24,281	$	(71,932)	$	(46,932)

Excess of cash received over fair value of private placement warrants	—		—	—		—		981,483		—		981,483

Remeasurement of Class A common stock subject to possible redemption	—		—	—		—		(1,005,764)		(27,058,912)		(28,064,676)

Net income	—		—	—		—		—		8,791,361		8,791,361

Balance as of March 31, 2021	—	$	—	7,187,500	$	719	$	—	$	(18,339,483)	$	(18,338,764)

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

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KL ACQUISITION CORP

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

Common Stock

Additional

Retained Earnings

Total

Class A

Class B

Paid-In

(Accumulated

Stockholders’


Shares

Amount

Shares

Amount

Capital

Deficit)

Equity
Balance as of January 1 , 2021

—

$
—

7,187,500

$
719

$
24,281

$
(71,932)

$
(46,932)

Sale of Units in Initial Public Offering, net of underwriter fee and fair value of public warrants

28,750,000

2,875

—

—

259,432,449

—

259,435,324

Excess of cash received over fair value of private placement warrants

—

—

—

—

981,483

—

981,483

Class A common stock subject to possible redemption

(26,416,123)

(2,642)

—

—

(260,438,213)

(3,720,375)

(264,161,230)

Net income

—

—

—

—

—

8,791,361

8,791,361

Balance as of March 31, 2021

2,333,877

$
233

7,187,500

$
719

$
—

$
4,999,054

$
5,000,006

Class A common stock subject to possible redemption

466,727

46

—

—

946,851

3,720,375

4,667,272

Net loss

—

—

—

—

—

(4,667,277)

(4,667,277)

Balance as of June 30, 2021

2,800,604

$
279

7,187,500

$
719

$
946,851

$
331,777

$
5,000,001

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

~~Table of Contents~~

~~KL ACQUISITION CORP~~

~~CONDENSED STATEMENT OF CASH FLOWS~~

~~FOR THE SIX MONTHS ENDED~~ ~~June 30, 2021~~

~~(Unaudited)~~


			Three Months Ended
			March 31,
			2022		2021
Cash Flows from Operating Activities:
Net income	$	4,124,084	$	4,144,861	$	8,791,361
Adjustments to reconcile net income to net cash used in operating activities:
Interest earned on trust account		(59,908)		(28,958)		(43,856)
Offering costs allocated to warrants				—		701,643
Change in fair value of warrant liabilities		(5,343,573)		(4,367,599)		(9,538,002)
Offering costs allocated to warrants		701,643
Changes in current assets and current liabilities:
Prepaid assets		(503,645)		21,622		(598,394)
Franchise tax payable		28,711		(94,294)		(71,289)
Accounts payable		281,028
Accounts payable and accrued expenses				(39,958)		245,000
Net cash used in operating activities		(771,660)		(364,326)		(513,537)

Cash Flows from Investing Activities:
Investment of cash into trust account		(287,500,000)		—		(287,500,000)
Net cash used in investing activities		(287,500,000)		—		(287,500,000)

Cash Flows from Financing Activities:
Proceeds from Initial Public Offering, net of underwriters' discount		281,750,000
Proceeds from the Initial Public Offering, net of underwriters’ discount				—		281,750,000
Proceeds from private placement		7,750,000		—		7,750,000
Repayment of promissory note to related party		(152,031)		—		(152,031)
Payments of offering costs		(356,109)		—		(356,109)
Net cash provided by financing activities		288,991,860		—		288,991,860

Net Change in Cash		720,200		(364,326)		978,323
Cash — Beginning		—		549,993		0
Cash — Ending	$	720,200	$	185,667	$	978,323

Supplemental Disclosure of Non-cash Financing Activities:
Initial value of Class A common stock subject to possible redemption	$	254,839,270
Change in value of Class A common stock subject to possible redemption	$	4,654,688
Initial value of warrant liabilities	$	19,189,839	$	—	$	19,189,839
Deferred underwriters’ discount payable charged to additional paid-in capital	$	10,062,500	$	—	$	10,062,500

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

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KL ACQUISITION CORP

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Note 1 — Organization and Business Operations

Organization and General

KL Acquisition Corp (the “Company”) was incorporated in Delaware on August 26, 2020. The Company was formed for the purpose of entering into a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with 1 or more businesses (a “Business Combination”). The Company has selected December 31 as its fiscal year end.

As of ~~June 30, 2021,~~March 31, 2022, the Company had not yet commenced any operations. All activity through ~~June 30, 2021,~~March 31, 2022, relates to the Company’s formation, ~~and~~ the Initial Public Offering (“IPO”) described ~~below.~~below and the Company’s search for targets for its initial Business Combination. The Company will not generate any operating revenues until after the completion of its initial ~~business combination,~~Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the IPO.

The Company’s sponsor is KL Sponsor, LLC, a Delaware limited liability company (the “Sponsor”).

Financing

The registration statement for the Company’s IPO was declared effective on January 7, ~~2021 (the “Effective Date”).~~2021. On January 12, 2021, the Company consummated the IPO of 28,750,000 units (the “Units” and, with respect to the common stock included in the Units being offered, the “public ~~share”~~shares”), at $10.00 per Unit, generating gross proceeds of $287,500,000, which is discussed in Note 3.

Simultaneously with the closing of the IPO, the Company consummated the sale of 5,166,667 warrants (the “Private Placement ~~Warrant”~~Warrants”) in a private placement to the Sponsor, at a price of $1.50 per Private Placement Warrant, generating gross proceeds of $7,750,000, which is discussed in Note 4.

Transaction costs amounted to $16,344,997 consisting of $5,750,000 of underwriting ~~fee,~~fees, $10,062,500 of deferred underwriting ~~fee~~fees and $532,497 of other offering costs. Of the total transaction cost $701,643 was expensed as non-operating expenses in that statement of operations with the rest of the offering ~~cost~~costs charged to stockholders’ equity. The transaction costs were allocated based on the relative fair value basis, compared to the total offering proceeds, between the fair value of the ~~public warrant~~Public Warrant (as defined in Note 3) liabilities and the Class A common stock.

Trust Account

Following the closing of the IPO on January 12, 2021, an amount of $287,500,000 from the net proceeds of the sale of the Units in the IPO and the sale of the Private Placement Warrants was placed in a trust account (“Trust Account”) ~~which will be~~and invested in 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 in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act of 1940, as amended (the “Investment Company Act”), as determined by the Company. Except with respect to interest earned on the funds held in the Trust Account that may be released to the Company to pay its tax obligations, the proceeds from the IPO and the sale of the Private Placement Warrants will not be released from the Trust Account until the earliest of (a) the completion of the Company’s initial ~~business combination,~~Business Combination, (b) the redemption of any public shares properly submitted in connection with a stockholder vote to amend the Company’s amended and restated certificate of incorporation, and (c) the redemption of the Company’s public shares if the Company is unable to complete the initial ~~business combination~~Business Combination within 24 months from the closing of the IPO, subject to applicable law. The proceeds deposited in the Trust Account could become subject to the claims of the Company’s creditors, if any, which could have priority over the claims of the Company’s public stockholders.

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KL ACQUISITION CORP

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Initial Business Combination

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the IPO, although substantially all of the net proceeds are intended to be generally applied toward consummating a ~~business combination.~~Business Combination.

~~Table of Contents~~

~~KL ACQUISITION CORP~~

~~NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS~~

The Company’s ~~business combination~~Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the Trust Account (net of taxes payable) at the time of the signing an agreement to enter into a ~~business combination.~~Business Combination. However, the Company will only complete a ~~business combination~~Business Combination if the ~~post-business combination~~post-Business Combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target 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.~~Business Combination.

The Company will provide its public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of the initial ~~business combination~~Business Combination either (i) in connection with a stockholder meeting called to approve the initial ~~business combination~~Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a proposed initial ~~business combination~~Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The stockholders will be entitled to redeem their shares for a pro rata portion of the amount then on deposit in the Trust Account (initially $10.00 per share, plus 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).

The shares of common stock subject to redemption is recorded at a redemption value and classified as temporary equity upon the completion of the IPO, in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from ~~Equity.”~~Equity” (“ASC 480”). In such case, the Company will proceed with a ~~business combination~~Business Combination if the Company has net tangible assets of at least $5,000,001 either immediately prior to or upon consummation of a ~~business combination~~Business Combination and, if the Company seeks stockholder approval, a majority of the issued and outstanding shares voted are voted in favor of the ~~business combination.~~Business Combination.

The Company will have 24 months from the closing of the IPO (with the ability to extend with stockholder approval) to consummate a ~~business combination~~Business Combination (the “Combination Period”). However, if the Company is unable to complete a ~~business combination~~Business Combination within the Combination Period, the Company will redeem 100% of the outstanding public shares for a pro rata portion of the funds held in the Trust Account, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to the Company, divided by the number of then outstanding public shares, subject to applicable law and as further described in the registration statement, and then seek to dissolve and liquidate.

The Company’s Sponsor, officers and directors have agreed to (i) waive their redemption rights with respect to their founder shares (as defined in Note 5) and public shares in connection with the completion of the initial ~~business combination,~~Business Combination, (ii) waive their redemption rights with respect to their founder shares and public shares in connection with a stockholder vote to approve an amendment to the Company’s amended and restated certificate of incorporation, and (iii) waive their rights to liquidating distributions from the Trust Account with respect to their founder shares and private placement shares if the Company fails to complete the initial ~~business combination~~Business Combination within the Combination Period.

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KL ACQUISITION CORP

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

The Company’s Sponsor has 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 a prospective target business with which the Company has entered into a written letter of intent, confidentiality or similar agreement or business combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per public share and (ii) 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 share due to reductions in the value of the trust assets, less taxes payable, provided that such 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 (whether or not such waiver is enforceable) nor will it apply to any claims under the Company’s indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities ~~Act.~~Act of 1933, as amended (the “Securities Act”). However, the Company has not asked its ~~sponsor~~Sponsor to reserve for such indemnification obligations, nor has the Company independently verified whether its ~~sponsor~~Sponsor has sufficient funds to satisfy its indemnity obligations and believe that the Company’s ~~sponsor’s~~Sponsor’s only assets are securities of the Company. Therefore, the Company cannot assure that its ~~sponsor~~Sponsor would be able to satisfy those obligations.

Liquidity and Going Concern

As of ~~June 30, 2021,~~March 31, 2022, the Company had cash outside the Trust Account of ~~$720,200~~$185,667 available for working capital needs. All remaining cash held in the Trust Account ~~are~~is generally unavailable for the Company’s use, prior to an initial ~~business combination,~~Business Combination, and is restricted for use either in a Business Combination or to redeem public shares. As of ~~June 30, 2021,~~March 31, 2022, none of the amount in the Trust Account was available to be withdrawn as described above.

~~Table of Contents~~

~~KL ACQUISITION CORP~~

~~NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS~~

Through June 30, 2021, the Company’s liquidity needs were satisfied through receipt of $25,000 from the sale of the founder shares, advances from the Sponsor in an aggregate amount of $152,031 and the remaining net proceeds from the IPO and the sale of Private Placement Warrants, not held in trust.

The Company anticipates that the ~~$720,200~~cash outside of the Trust Account as of ~~June 30, 2021,~~March 31, 2022 will not be sufficient to allow ~~the Company~~it to operate ~~for at least~~until January 12, 2023. Until the ~~next 12 months from the issuance of the financial statements, assuming that a Business Combination is not consummated during that time. Until~~ consummation of its 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) from the initial stockholders, ~~the Company’s~~its officers and directors, or their respective affiliates ~~(which is~~(as described in Note 5), 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~~If the Company’s estimates of the costs of undertaking in-depth due diligence and negotiating ~~business combination is~~the Business Combination are 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.~~Business Combination. Moreover, the Company will need to raise additional capital through loans from its Sponsor, officers, directors, or third parties. None of the Company’s Sponsor, ~~the Company’s~~ officers or directors are under any obligation to advance funds to, or to invest in, the Company. If ~~the Company~~it is unable to raise additional capital, itthe Company may be required to take additional measures to conserve liquidity, which could include, but is not necessarily be limited to, curtailing operations, suspending the pursuit of ~~its~~the Company’s 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.

The Company has until January 12, 2023 to consummate a Business Combination. It is uncertain that the Company will be able to consummate a Business Combination by this time. If a Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution. Management has determined that the mandatory liquidation, should a Business Combination not occur, and potential subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time, which is considered to be one year from the issuance of the financial statements. No adjustments have been made to the carrying amounts of assets or liabilities should we be required to liquidate after January 12, 2023.

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KL ACQUISITION CORP

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Risks and Uncertainties

On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus (the “COVID-19 outbreak”). In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. The full impact of the COVID-19 outbreak continuesManagement is continuing to evolve. The impact of the COVID-19 outbreak on the Company’s financial position will depend on future developments, including the duration and spread of the outbreak and related advisories and restrictions. These developments andevaluate the impact of the COVID-19 ~~outbreak~~pandemic on the ~~financial~~industry, the geopolitical conditions resulting from the recent invasion of Ukraine by Russia and subsequent sanctions against Russia, Belarus and related individuals and entities and the status of debt and equity markets, as well as protectionist legislation in the Company’s target markets and has concluded that while it is reasonably possible that it could have a negative effect on the ~~overall economy are highly uncertain and cannot be predicted. If~~Company's financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of the financial ~~markets and/or~~statements. The financial statements do not include any adjustments that might result from the overall economy are impacted for an extended period, the Company’s financial position may be materially adversely affected. Additionally, the Company’s ability to complete an initial business combination may be materially adversely affected due to significant governmental measures being implemented to contain the COVID-19 outbreak or treat its impact, including travel restrictions, the shutdownoutcome of businesses and quarantines, among others, which may limit the Company’s ability to have meetings with potential investors or affect the ability of a potential target company’s personnel, vendors and service providers to negotiate and consummate an initial business combination in a timely manner. The Company’s ability to consummate an initial business combination may also be dependent on the ability to raise additional equity and debt financing, which may be impacted by the COVID-19 outbreak and the resulting market downturn.this uncertainty.

Note 2 — Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the U.S. Securities and Exchange Commission (“SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.

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~~KL ACQUISITION CORP~~

~~NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS~~

The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020~~2021 as filed with the SEC on ~~June 30, 2021, as well as the Company’s Current Reports on Form 8-K.~~March 31, 2022 (the “2021 Annual Report”). The interim results for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, ~~2021~~2022 or for any future interim periods.

Emerging Growth Company Status

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, ~~of 1933, as amended, (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, 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 stockholder 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 Securities Exchange ~~Act)~~Act of 1934, as amended (the “Exchange Act”)) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a 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 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 financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

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KL ACQUISITION CORP

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires 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 and the reported amounts of expenses during the reporting period. Actual results could differ 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.

Marketable Securities Held in Trust Account

At ~~June 30,~~March 31, 2022 and December 31, 2021, ~~the assets~~funds held in the Trust Account were $287,598,643 and $287,569,685 of investments held in ~~U.S.~~a money market ~~fund. During~~fund, respectively, characterized as Level 1 investments within the ~~six months ended June 30, 2021, the Company did not withdraw any of interest income from the Trust Account to pay its tax obligations.~~fair value hierarchy under ASC 820 (as defined below).

The Company’s portfolio of investments held in the Trust Account is comprised 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, or a combination thereof. The Company’s investments held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheets 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.~~

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~~KL 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 a cash account in a financial institution, which, at times, may exceed the Federal ~~Depository~~Deposit Insurance Coverage limit of $250,000. At ~~June 30, 2021,~~March 31, 2022, the Company ~~has~~had not experienced losses on this account.

Common Stock Subject to Possible Redemption

The Company accounts for its Class A common stock subject to possible redemption in accordance with the guidance in ASC ~~Topic 480 “Distinguishing Liabilities from Equity.”~~480. Class A common stock subject to mandatory redemption (if any) are classified as a liability instrument and are measured at fair value. Conditionally redeemable common stock (including common stock 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. At all other times, common stock are classified as stockholders’ equity. The Company’s common stock 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 ~~June 30,~~March 31, 2022 and December 31, 2021, ~~25,949,396~~28,750,000 shares of Class A common stock subject to possible redemption ~~are~~were presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s balance ~~sheet.~~

~~Net (Loss) Income per Common Stock~~

The Company complies with accounting and disclosure requirements ASC Topic 260, “Earnings Per Share.” The Company’s statements of operations include a presentation of (loss) income per share for Class A common stock subject to possible redemption in a manner similar to the two-class method of (loss) income per share. Net income per common stock, basic and diluted for Class A common stock is calculated by dividing the interest income earned on the Trust Account $59,908 by the weighted average number of Class A common stock outstanding. Net (loss) income per common stock, basic and diluted for Class B common stock is calculated by dividing the net (loss) income, adjusted for income attributable to Class A common stock, by the weighted average number of Class B common stock outstanding for the period. Class B common stock includes the Founder Shares as these shares do not have any redemption features and do not participate in the income earned on the Trust Account.

The Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted (loss) income per share is the same as basic (loss) income per share for the period presented.sheets, respectively.

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KL ACQUISITION CORP

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Net Income (Loss) Per Share of Common Stock

The ~~following table reflects~~Company has two classes of shares, which are referred to as Class A common stock and Class B common stock. Earnings and losses are shared pro rata between the two classes of shares. The Company has not considered the effect of the warrants sold in the IPO and the Private Placement to purchase an aggregate of 14,750,000 of its Class A common stock in the calculation of diluted loss per share, since their exercise is contingent upon future events. As a result, diluted net income per common stock is the same as basic net income per common stock.

The table below presents a reconciliation of the numerator and denominator used to compute basic and diluted net ~~(loss)~~ income per share for each class of common ~~share (in dollars, except per share amounts):~~stock.

Three Months

Six Months

Ended

Ended

June 30, 2021

June 30, 2021

(Unaudited)

(Unaudited)
Redeemable Class A Common Stock




Numerator: Earnings allocable to Redeemable Class A Common Stock




Interest income on investments held in Trust Account

$
16,052

$
59,908
Amount available to pay franchise taxes

(16,052)

(59,908)
Net earnings

$
—

$
—
Denominator: Weighted average Redeemable Class A Common Stock




Basic and diluted weighted average shares outstanding, Redeemable Class A Common Stock

26,410,994

25,985,664
Basic and diluted net earnings per share, Redeemable Class A Common Stock

$
0.00

$
0.00
Non-Redeemable Class A and Class B Common Stock




Numerator: Net (loss) income minus net earnings




Net (loss) income

$
(4,667,277)

$
4,124,084
Net earnings

—

—
Non-redeemable net (loss) income

$
(4,667,277)

$
4,124,084
Denominator: Weighted average Non-Redeemable Class A and Class B Common Stock




Basic and diluted weighted average shares outstanding, Non-Redeemable Class A and Class B Common Stock

9,526,506

9,783,838
Basic and diluted net (loss) income per share, Non-Redeemable Class A and Class B Common Stock

$
(0.49)

$
0.42


	For the Three Months Ended
	March 31,
	2022				2021
	Class A		Class B		Class A		Class B
Basic and diluted net income per share:
Numerator:
Allocation of net income	$	3,315,889	$	828,972	$	6,842,537	$	1,948,824

Denominator:

Weighted-average shares outstanding		28,750,000		7,187,500		25,236,111		7,187,500
Basic and diluted net income per share	$	0.12	$	0.12	$	0.27	$	0.27

Offering Costs

The Company complies with the requirements of the FASB ASC Topic 340-10-S99-1, “Accounting for Transaction Cost”, and SEC Staff Accounting Bulletin ~~(“SAB”)~~ Topic 5A, - “Expenses of Offering”. Offering costs consist principally of professional and registration fees incurred through the balance sheet date that are related to the ~~Public Offering~~IPO and that were charged to ~~stockholders’~~temporary equity upon the completion of the IPO. Accordingly, on ~~June 30,~~December 31, 2021, offering costs totaling $16,344,997 have been charged to ~~stockholders’~~temporary equity (consisting of $5,750,000 of underwriting ~~fee,~~fees, $10,062,500 of deferred underwriting ~~fee~~fees and $532,497 of other offering costs). Of the total transaction cost, $701,643 was expensed as non-operating expenses in that statement of operations with the ~~rest of the~~remaining offering cost charged to ~~stockholders’~~temporary equity. The transaction costs were allocated based on the relative fair value basis, compared to the total offering proceeds, between the fair value of the public warrant liabilities and the Class A common stock.

Stock Based Compensation

The Company complies with FASB ASC Topic 718, “Compensation — Stock Compensation” (“ASC 718”), regarding founder shares acquired by directors of the Company at prices below fair value. The acquired shares shall vest upon the Company consummating an initial Business Combination (the “Vesting Date”). If prior to the Vesting Date, the director ceases to be a director, the shares will be forfeited. The founder shares owned by the directors (1) may not be sold or transferred, until one year after the consummation of a Business Combination, (2) not be entitled to redemption from the funds held in the Trust Account, or any liquidating distributions. The Company has 24 months from the date of the IPO to consummate a Business Combination, and if a Business Combination is not consummated, the Company will liquidate and the shares will become worthless (See Note 5).

Fair Value of Financial Instruments

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the ~~Financial Accounting Standards Board (“FASB”)~~FASB ASC Topic 820, “Fair Value Measurements and ~~Disclosures,”~~Disclosures” ("ASC 820"), approximates the carrying amounts represented in the balance ~~sheet.~~sheets.

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KL ACQUISITION CORP

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

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 stock 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 re-assessed at the end of each reporting period.

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~~KL ACQUISITION CORP~~

~~NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS~~

The Company accounts for its 14,750,000 ~~common stock~~ warrants, ~~issued in connection with IPO (9,583,333)~~including 9,583,333 Public Warrants and 5,166,667 Private Placement Warrants, ~~(5,166,667)~~ as derivative warrant liabilities in accordance with ASC 815-40. 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 statement of operations. The Company’s warrant liability for the Private Placement Warrants is based on a Black-Scholes-Merton model. In February 2021, the Company’s Public Warrants began trading on the ~~NASDAQ.~~Nasdaq Capital Market. As such, the price for the Public Warrants is based on an unadjusted market price.

Income Taxes

The Company accounts for income taxes under FASB ASC Topic 740, ~~Income Taxes~~“Income Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements 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. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition.

The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were 0 unrecognized tax benefits and 0 amounts accrued for interest and penalties as of ~~June 30,~~March 31, 2022 and December 31, 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 has identified the United States as its only “major” tax jurisdiction.

The Company may be subject to potential examination by federal and state taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.

Recent Accounting Standards

In August 2020, the FASB issued Accounting Standards Update (“ASU”) ~~ASU No.~~Topic 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. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for fiscal years beginning after December 15, ~~2023, including interim periods within those fiscal years, with early adoption permitted.~~2023. Management is currently evaluating the new guidance, but does not expect the adoption of this guidance to have a material impact on the Company’s financial statements.

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KL ACQUISITION CORP

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Note 3 — Initial Public Offering

In connection with the IPO, the Company sold 28,750,000 Units including 3,750,000 Units purchased by the underwriters pursuant to the over-allotment option, at a price of $10.00 per Unit. Each Unit consists of 1 share of Class A common stock, par value $0.0001 per share, and one-third of one redeemable warrant (“Public Warrant”). Each whole Public Warrant entitles the holder to purchase 1 share of Class A common stock at a price of $11.50 per share.

~~Table~~All of ~~Contents~~the 28,750,000 shares of Class A common stock sold as part of the Units in the IPO contain a redemption feature which allows for the redemption of such public shares in connection with the Company’s liquidation, if there is a stockholder vote or tender offer in connection with the Business Combination and in connection with certain amendments to the Company’s certificate of incorporation. In accordance with SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within the control of the Company require common stock subject to redemption to be classified outside of permanent equity.

~~KL ACQUISITION CORP~~If it is probable that the equity instrument will become redeemable, the Company has the option to either accrete changes in the redemption value over the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument or to recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period. The Company recognizes changes in redemption value immediately as they occur. Immediately upon the closing of the IPO, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable common stock resulted in charges against additional paid-in capital and accumulated deficit.

~~NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS~~As of March 31, 2022 and December 31, 2021, the shares of common stock reflected on the balance sheet are reconciled in the following table:


Gross proceeds from IPO	$	287,500,000
Less:
Proceeds allocated to Public Warrants		(12,421,322)
Common stock issuance costs		(15,643,354)
Plus:
Remeasurement of carrying value to redemption value		28,064,676
Contingently redeemable common stock	$	287,500,000

Note 4 — Private Placement

Simultaneously with the closing of the IPO, the Sponsor purchased an aggregate of 5,166,667 Private Placement Warrants at a price of $1.50 per warrant ($7,750,000 in the aggregate), each Private Placement Warrant is exercisable to purchase 1 share of Class A common stock at a price of $11.50 per share. A portion of the purchase price of the Private Placement Warrants was added to the proceeds from the IPO to be held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds of the sale of the Private Placement Warrants will be used to fund the redemption of the ~~Public Shares~~public shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless. There will be no redemption rights or liquidating distributions from the Trust Account with respect to the Private Placement Warrants.

Note 5 — Related Party Transactions

Founder Shares

On December 29, 2020, the Sponsor paid $25,000, or approximately $0.003 per share, to cover certain offering costs in consideration for 8,625,000 shares of Class B common stock, par value ~~$0.0001.~~$0.0001 (“founder shares”). On December 16, 2020, the Sponsor effected a surrender of 1,437,500 founder shares to the Company, resulting in a decrease in the total number of Class B ~~ordinary shares~~common stock outstanding from 8,625,000 to 7,187,500 founder shares.

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KL ACQUISITION CORP

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

The Sponsor has agreed that, subject to certain limited exceptions, the founder shares will not be transferred, assigned, sold or released from escrow until the earlier of (A) one year after the completion of a Business Combination or (B) subsequent to a Business Combination. Notwithstanding the foregoing, if the last reported sale price of the shares of the Company’s Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after a Business Combination, the converted Class A common stock will be released from the lock-up.

Promissory Note — Related Party

On August 26, 2020, the Company issued an unsecured promissory note to the Sponsor (the “Promissory Note”), pursuant to which the Company may borrow up to an aggregate principal amount of $300,000. The Promissory Note is non-interest bearing and payable on the earlier of (i) ~~June 30,~~March 31, 2021 or (i) the consummation of the ~~Proposed Public Offering.~~IPO. As of ~~June 30,~~March 31, 2021, the Company had repaid the balance of $152,031 under the Promissory Note in full.

Stock Based Compensation

On December 16, 2020, the Company’s Sponsor transferred a total of 120,000 founder shares to directors.

The Company has determined the valuation of the founder shares as of the Grant Date. The valuation resulted in a fair value of $5.08 per share as of the Grant Date, or an aggregate of $609,600 for the 120,000 shares. Upon consummation of an initial Business Combination the Company will recognize $609,600 in compensation expense.

Administrative Support Agreement

Commencing on the date of the IPO, the Company has agreed to pay the Sponsor a total of $10,000 per month for office space and administrative support services. Upon completion of the Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees.

Working Capital Loans

In order to finance transaction costs in connection with a Business Combination, the initial stockholders or an affiliate of the initial stockholders or certain of the Company’s directors and officers may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. 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. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible into warrants of the post-Business Combination entity at a price of $1.50 per warrant. The warrants would be identical to the Private Placement Warrants. As of ~~June 30,~~March 31, 2022 and December 31, 2021, no0 Working Capital Loans ~~have~~had been issued.

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~~KL ACQUISITION CORP~~

~~NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS~~

Note 6 — Commitments & Contingencies

Registration Rights

The holders of the ~~Founder Shares,~~founder shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans (and any Class A common stock issuable upon the exercise of the Private Placement Warrants and warrants issued upon conversion of the Working Capital Loans) will be entitled to registration rights pursuant to a registration rights agreement signed at the effectiveness of the Company registration statement for the IPO. The holders of at least 15% of all the then issued and outstanding number of these securities are entitled to make up to 3 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

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KL ACQUISITION CORP

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

to consummation of a Business Combination. However, the registration rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lockup period. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

Underwriting Agreement

On January 12, 2021, the Company paid the underwriters an underwriting discount of $0.20 per Unit, or $5,750,000 in the aggregate. Additionally, a deferred underwriting discount of $0.35 per Unit, or $10,062,500 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.

Note 7 — Stockholders’ Equity

Preferred Stock—

The Company is authorized to issue a total of 1,000,000 shares of preferred stock, at par value of $0.0001 each. At ~~June 30,~~March 31, 2022 and December 31, 2021, there were 0 shares of preferred stock issued or outstanding.

Class A Common Stock—

The Company is authorized to issue a total of 200,000,000 shares of Class A common stock, at par value of $0.0001 each. At ~~June 30,~~March 31, 2022 and December 31, 2021, there were ~~2,800,604~~28,750,000 shares issued ~~and~~ or outstanding ~~(excluding 25,949,396 shares~~ of which all were subject to possible ~~redemption)~~redemption.

Class B Common Stock—

The Company is authorized to issue a total of 20,000,000 shares of Class B common stock, at par value of $0.0001 ~~each. At June 30,~~each.At March 31, 2022 and December 31, 2021, there were 7,187,500 shares of Class B common stock issued orand outstanding.

Holders of Class B common stock have the right to elect all of the Company’s directors prior to a Business Combination. Holders of Class A common stock and Class B common stock will vote together as a single class on all other matters submitted to a vote of stockholders except as required by law. In connection with the consummation of the Company’s IPO on January 12, 2021, the underwriters exercised their over-allotment option to the fullest extent comprising 3,750,000 ~~units issued pursuant option.~~Units. Due to the full exercise of the over-allotment option, the 937,500 founder shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters will not be forfeited.

The shares of Class B common stock will automatically convert into shares of Class A common stock upon the consummation of a Business Combination at a ratio such that the number of shares of Class A common stock issuable upon conversion of all founder shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of shares of common stock issued and outstanding upon completion of the IPO, plus (ii) the sum of (a) all shares of common stock issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or deemed issued by the Company in connection with or in relation to the completion of a Business Combination, excluding (1) any shares of Class A common stock or equity-linked securities exercisable for or convertible into shares of Class A common stock issued, or to be issued, to any seller in a Business Combination and any (2) warrants issued to the Sponsor or any of its affiliates upon conversion of Working Capital Loans minus (b) the number of public shares redeemed by Public Stockholders in connection with a Business Combination. In no event will the shares of Class B common stock convert into shares of Class A common stock at a rate of less than one to one.

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~~KL ACQUISITION CORP~~

~~NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS~~

Note 8 — Warrants

Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination or (b) one year from the closing of the IPO. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.

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KL ACQUISITION CORP

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

The Company will not be obligated to deliver any Class A common stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the Class A common stock underlying the warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration, or a valid exemption from registration is available. No warrant will be exercisable and the Company will not be obligated to issue a share of Class A common stock upon exercise of a warrant unless the share of Class A common stock 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~~warrants.

The Company has agreed that as soon as practicable, but in no event later than twenty business days after the closing of a Business Combination, the Company will use its commercially reasonable efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the Class A common stock issuable upon exercise of the warrants. The Company will use its commercially reasonable efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration or redemption of the warrants in accordance with the provisions of the warrant agreement. If a registration statement covering the issuance of the Class A common stock 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 common stock is 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 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, it 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~~Warrants When the ~~price~~Price per ~~share~~Share of Class A ~~common stock equals~~Common Stock Equals or ~~exceeds $18.00~~. Exceeds $18.00

Once the Public Warrants become exercisable, the Company may redeem the Public Warrants (except with respect to the Private Placement Warrants):

●

in whole and not in part;

●

at a price of $0.01 per warrant;

●

upon not less than 30 days' prior written notice of redemption to each warrant holder; and

●

if, and only if, the reported last reported sale price of the Class A common stock for any 20 trading days within a 30-trading day period ending 3 business days before the Company sends the notice of redemption to the warrant holders (the “Reference Value”) equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like).

If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if the Company are unable to register or qualify the underlying securities for sale under all applicable state securities laws. However, in this case, the Company will not redeem the warrants unless an effective registration statement under the Securities Act covering the Class A common stock issuable upon exercise of the warrants is effective and a current prospectus relating to those shares of the Company’s Class A common stock is available throughout the 30-day redemption period.

Redemption of ~~warrants when~~Warrants When the ~~price~~Price per ~~share~~Share of Class A ~~common stock equals~~Common Stock Equals or ~~exceeds $10.00~~. Exceeds $10.00

Once the Public Warrants become exercisable, the Company may redeem the Public Warrants:

●

in whole and not in part;

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KL ACQUISITION CORP

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

●

at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption; provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares based on the redemption date and the fair market value of the Class A common stock;

●

if, and only if, the Reference Value equals or exceeds $10.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like); and

●

if the Reference Value is less than $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like), 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, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of shares of Class A common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, except as described below, the warrants will not be adjusted for issuance of Class A common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the 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 warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.

In addition, if (x) the Company issues additional shares of Class A common stock 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 share of Class A common stock (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~~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 on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s Class A common stock 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, 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 $10.00 and $18.00 per share redemption trigger prices will be adjusted (to the nearest cent) to be equal to 100% and 180% of the higher of the Market Value and the Newly Issued Price, respectively.

The Private Placement Warrants will be identical to the Public Warrants, except that the Private Placement Warrants and the Class A common stock 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. Additionally, 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. 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 9 ~~— Investment Held in Trust Account~~

Substantially all of the Company’s trust assets on the condensed balance sheet consist of U.S. money market funds which are classified as cash equivalents. Fair values of these investments are determined by Level 1 inputs utilizing quoted prices (unadjusted) in active markets for identical assets. As of June 30, 2021, investments in the Trust Account totaled $287,559,908.

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~~KL ACQUISITION CORP~~

~~NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS~~

~~Note 10~~ — 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 tiers include:
● Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;

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KL ACQUISITION CORP

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

● 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.
Substantially all of the Company's trust assets on the balance sheet consist of U. S. Money Market funds which are classified as cash equivalents. Fair values of these investments are determined by Level 1 inputs utilizing quoted prices (unadjusted) in active markets for identical assets.
Under the guidance in ASC 815-40, the Warrants do not meet the criteria for equity treatment. As such, the Warrants must be recorded on the condensed balance sheet at fair value. This valuation is subject to re-measurement at each balance sheet date. With each re-measurement, the warrant valuation will be adjusted to fair value, with the change in fair value recognized in the Company’s ~~statement~~statements of operations.
The Company’s warrant liability for the Private Placement Warrants is based on a valuation model utilizing inputs from observable and unobservable markets with less volume and transaction frequency than active markets. The fair value of the Private Placement Warrant liability classified within Level 3 of the fair value hierarchy.
The Company’s warrant liability for the Public Warrants is based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. The fair value of the Public Warrant liability is classified within Level 1 of the fair value hierarchy.
Substantially all of the Company’s trust assets on the condensed balance sheet consist of U. S. Money Market funds which are classified as cash equivalents. Fair values of these investments are determined by Level 1 inputs utilizing quoted prices (unadjusted) in active markets for identical assets.
The following table presents information about the Company’s assets that are measured at fair value on a recurring basis at ~~June 30,~~March 31, 2022 and December 31, 2021 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

Level 1

Level 2

Level 3
Description

Level

March 31, 2022

December 31, 2021
Investment held in the Trust Account

$
287,559,908

$
—

$
—

1

$
287,598,643

$
287,569,685
Public Warrants

$
8,987,250

$
—

$
—

1

$
2,225,250

$
5,079,166
Private Warrants

$
—

$
—

$
4,859,016
Private Placement Warrants

3

$
1,237,945

$
2,751,628

The Company utilized a Black-Scholes-Merton model to value the Private Placement Warrants at ~~June 30, 2021~~March 31, 2022 and a Monte Carlo simulation at January 12, 2021. The Company’s Private Placement Warrant liability is based on a valuation model utilizing management judgment and pricing inputs from observable and unobservable markets with less volume and transaction frequency than active markets. Significant deviations from these estimates and inputs could result in a material change in fair value. In February 2021, the Public Warrants began trading in the open market and were reclassified to Level 1.
The aforementioned warrant liabilities are not subject to qualified hedge accounting.
The key inputs into the valuation models were as follows at March 31, 2022 and December 31, 2021:


At March 31, 2022

December 31, 2021

Stock price

$
9.8

$
10.0

Strike price

$
11.50

$
11.50

Term (in years)

5.39

5.52

Volatility

4.0
%

10.0
%
Risk-free rate

2.42
%

1.31
%
Dividend yield

0.0
%

0.0
%

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KL ACQUISITION CORP

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

~~The key inputs into the valuation models were as follows at initial measurement and at June 30, 2021:~~

At January 12, 2021

(Initial Measurement)

At June 30, 2021

Stock price

$
9.95

$
9.70

Strike price

$
11.50

$
11.50

Term (in years)

6.00

5.00

Volatility

25.0
%

10.0
%
Risk-free rate

0.67
%

1.00
%
Dividend yield

0.0
%

0.0
%

The following table provides a reconciliation of changes in fair value liability of the beginning and ending balances for ~~our assets and liabilities~~the Company’s Private Placement Warrants classified as Level 3, for the ~~three-month period~~three months ended ~~June 30, 2021.~~March 31, 2022:

Fair value as of December 31, 2021

$
2,751,628
Change in fair value

(1,513,683)
Fair Value at March 31, 2022

$
1,237,945

~~Fair value as of August 26, 2020~~

$
—
~~Initial measurement on January 12, 2021~~

~~19,189,839~~
~~Public Warrants reclassified to level 1~~⁽¹⁾

~~(6,229,166)~~
~~Change in fair value~~

~~(8,101,657)~~
~~Fair Value at June 30, 2021~~

~~4,859,016~~
~~(1)~~ ~~Assumes the Public Warrants were reclassified on March 31, 2021.~~

Note 1110 — Subsequent Events
The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date that the accompanying unaudited condensed financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the accompanying unaudited condensed financial statements.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operati~~ons~~ons.
References to the “Company,” “us,” “our” or “we” refer to KL Acquisition Corp. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited financial statements and related notes included herein.
Cautionary Note Regarding Forward-Looking Statements
All statements other than statements of historical fact included in this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022 (the ~~“Report”~~“Quarterly Report”) including, without limitation, statements under this ~~“Management’s~~“Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. When used in this Quarterly Report, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend” and similar expressions, as they relate to us or the Company’s management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, the Company’s management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed in our filings with the SEC. All subsequent written or oral forward-looking statements attributable to us or persons acting on the Company’s behalf are qualified in their entirety by this paragraph.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report.
Overview
We were incorporated in Delaware on August 26, 2020 for the purpose of entering into a Business Combination with one or more businesses.
On January 12, 2021, we consummated our IPO of 28,750,000 Units, including 3,750,000 Units purchased by the underwriters pursuant to the over-allotment option granted by the Company, generating gross proceeds to the Company of $287,500,000. Simultaneously with the closing of the IPO, we completed the private sale of an aggregate of 5,166,667 warrants to our Sponsor, generating gross proceeds of approximately $7,750,000.
A total of $287,500,000, comprised of $281,750,000 of the proceeds from the IPO and $5,750,000 of the proceeds of the sale of the Private Placement Warrants was placed in the Trust Account maintained by Continental Stock Transfer & Trust Company, acting as trustee.
Factors That May Adversely Affect Our Results of Operations
Our results of operations and our ability to complete an initial Business Combination may be adversely affected by various factors that could cause economic uncertainty and volatility in the financial markets, many of which are beyond our control. Our business could be impacted by, among other things, downturns in the financial markets or in economic conditions, increases in oil prices, inflation, increases in interest rates, supply chain disruptions, declines in consumer confidence and spending, the ongoing effects of the COVID-19 pandemic, including resurgences and the emergence of new variants, and geopolitical instability, such as the military conflict in the Ukraine. We cannot at this time fully predict the likelihood of one or more of the above events, their duration or magnitude or the extent to which they may negatively impact our business and our ability to complete an initial Business Combination.
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~~IPO and identifying a target company for our initial ~~business combination.~~Business Combination. We do not expect to generate any operating revenues until after completion of our initial ~~business combination.~~Business Combination. We generate non-operating income in the form of interest income on cash and cash equivalents held in the Trust Account. 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.~~in connection with our search for targets for our initial Business Combination.

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For the three months ended March 31, 2022, we had a net income of approximately $4.14 million, which included a gain from the change in fair value of warrant liabilities of $4.37 million and interest income on marketable securities held in Trust Account of $0.03 million, offset by a loss from operations of $0.25 million.

For the three months ~~and six months~~ ended ~~June 30,~~March 31, 2021, we had a net ~~loss of $4,667,277 and net~~ income of ~~$4,124,084, respectively. We incurred $488,900~~approximately $8.79 million, which included a gain from the change in fair value of warrant liabilities of $9.54 million and ~~$577,754 of formation and operating costs consisting mostly of general and administrative expenses for the three months and six months ended June 30, 2021, respectively. We had investment~~interest income ~~for the three months and six months ended June 30, 2021 of $16,052 and $59,908, respectively~~ on ~~our amounts~~marketable securities held in the Trust Account of $0.04 million, offset by a loss from operations of $0.09 million and ~~loss/gain on fair value~~warrant issuance cost of ~~warrants of $4,194,429 and $5,343,573, respectively.~~$0.7 million.

Liquidity and Capital Resources

As of ~~June 30, 2021,~~March 31, 2022, we had cash outside the Trust Account of ~~$720,200~~$185,667 available for working capital needs. All remaining cash held in the Trust Account ~~are~~is generally unavailable for our use, except interests earned on the ~~Company’s use,~~funds held in the Trust Account and released to pay our taxes, prior to an initial ~~business combination,~~Business Combination, and is restricted for use either in a ~~business combination~~Business Combination or to redeem ~~common stock.~~public shares. As of ~~June 30, 2021,~~March 31, 2022, none of the amount in the Trust Account was available to be withdrawn, ~~as described above.~~except interests earned on the funds held in the Trust Account and released to pay our taxes.

Through June 30, 2021, the Company’s liquidity needs were satisfied through receipt of $25,000 from the sale of the founder shares, advances from the Sponsor in an aggregate amount of $152,031, and the remaining net proceeds from the IPO and the sale of Private Placement Warrants.

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~~The Company anticipates~~We anticipate that the ~~$720,200~~cash outside of the Trust Account as of ~~June 30, 2021,~~March 31, 2022 will not be sufficient to allow ~~the Company~~us to operate ~~for at least the next~~until January 12, ~~months, assuming that a business combination is not consummated during that time.~~2023. Until consummation of our ~~business combination, the Company~~Business Combination, we 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 stockholders, ~~the Company’s~~our 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.~~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~~If our estimates of the costs of undertaking in-depth due diligence and negotiating ~~business combination~~the Business Combination is less than the actual amount necessary to do so, ~~the Company~~we may have insufficient funds available to operate ~~its~~our business prior to the ~~business combination.~~Business Combination. Moreover, ~~the Company~~we will need to raise additional capital through loans from ~~its~~our Sponsor, officers, directors, or third parties. None of ~~the~~our Sponsor, ~~the Company’s~~our officers or directors are under any obligation to advance funds to, or to invest in, ~~the Company.~~us. If ~~the Company is~~we are unable to raise additional capital, itwe 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~~our business plan, and reducing overhead expenses. ~~The Company~~We cannot provide any assurance that new financing will be available to itus 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 stock 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 14,750,000 ~~Warrants~~warrants in connection with our IPO and private placement, which, are recognized as derivative liabilities in accordance with ASC 815-40. Accordingly, we recognize the ~~Warrants~~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. The Company’s warrant liability for the Private Placement Warrants is based on a Black-Scholes-Merton model. In ~~February~~March 2021, the Company’s Public Warrants began trading on the ~~NASDAQ.~~Nasdaq Capital Market. As such, the price for the Public Warrants is based on an unadjusted market price.

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Critical Accounting Policies

The preparation of the financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the period reported. Actual results could materially differ from those estimates. We have not identified any critical accounting policies.

Warrant Liabilities

We account for the warrants issued in connection with our ~~initial public offering~~IPO in accordance with ~~Accounting Standards Codification (“ASC”)~~ASC 815-40, ~~Derivatives and Hedging—Contracts in Entity’s Own Equity~~ ~~(“ASC 815”),~~ under which the warrants do not meet the criteria for equity classification and must be recorded as liabilities. As the warrants meet the definition of a derivative as contemplated in ASC 815, the ~~Warrants~~warrants are measured at fair value at inception and at each reporting date in accordance with ASC 820~~Fair Value Measurement~~,,” with changes in fair value recognized in the Statement of Operations in the period of change.

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Common ~~stock subject~~Stock Subject to ~~possible redemption~~Possible Redemption

The Company accounts for its Class A common stock subject to possible redemption in accordance with the guidance in ~~Accounting Standards Codification (“ASC”)~~ASC Topic ~~480 “Distinguishing Liabilities from Equity.”~~480. Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock 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) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s Class A common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. As of ~~June 30,~~March 31, 2022 and December 31, 2021, ~~26,416,123~~28,750,000 and no28,750,000 shares of Class A common stock subject to possible redemption ~~are~~were presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s balance ~~sheet,~~sheets, respectively.

Net Income (Loss) ~~Income~~ Per Share of Common ~~Share~~Stock

~~Net (loss)~~The Company has two classes of common stock, which are referred to as “Class A common stock” and “Class B common stock”. Earnings and losses are shared pro rata between the two classes of shares. The 14,750,000 shares of Class A common stock underlying the outstanding warrants of the Company were excluded from diluted earnings per share for the three months ended March 31, 2022 and 2021 because the warrants are contingently exercisable, and the contingencies have not yet been met. As a result, diluted net income per share ~~is computed by dividing net (loss) earnings by the weighted-average number of shares~~ of common stock ~~outstanding during~~is the ~~period. The Company has not considered the effect of the warrants sold in the Public Offering and Private Placement to purchase an aggregate of 14,750,000 shares in the calculation of diluted~~same as basic net income per share ~~since the exercise~~ of ~~the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive.~~

~~The Company’s statement of operations includes a presentation of (loss) income per share for~~ common shares subject to possible redemption and applies the two-class method in calculating (loss) income per share. Net earnings per common share, basic and diluted, for Class A redeemable common stock is calculated by dividing the allocable unrealized gains on investments held in the Trust Account, net of applicable franchise and income taxes, by the weighted average number of Class A redeemable common stock outstanding since original issuance. Net (loss) income per share, basic and diluted, for Class A and Class B non-redeemable common stock is calculated by dividing the net (loss) income, adjusted for income attributable to Class A redeemable common stock, by the weighted average number of Class A and Class B non-redeemable common stock outstanding for the period. Class B non-redeemable common stock includes the Founder Shares as these shares do not have any redemption features and do not participate in the income earned on the Trust Account.stock.

Recent Accounting Standards

In August 2020, the FASB issued ~~Accounting Standards Update (“ASU”)~~ 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. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for fiscal years beginning after December 15, ~~2023, including interim periods within those fiscal years, with early adoption permitted.~~2023. Management is currently evaluating the new guidance, but does not expect the adoption of this guidance to have a material impact on the Company’s financial statements.

Off-Balance Sheet Arrangements; Commitments and Contractual Obligations

As of ~~June 30, 2021,~~March 31, 2022, we did not have any off-balance sheet arrangements as defined in Item 303(a) (4)(ii) of Regulation S-K and did not have any commitments or contractual obligations.

Item 3. Quantitative and Qualitative Disclosures About Market ~~Risk~~Risk.
~~Not required for~~We are a smaller reporting ~~companies.~~company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.

2223

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Item 4. Controls and ~~Procedures~~Procedures.
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed ~~by us~~ in our reports filed or submitted under the Exchange Act ~~reports~~ is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and ~~forms,~~forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that ~~such~~ information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our ~~principal executive officer~~Chief Executive Officer and ~~principal financial officer or persons performing similar functions, as appropriate~~Chief Financial Officer, to allow timely decisions regarding required disclosure.
As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of ~~the design and operation of~~ our disclosure controls and ~~procedures.~~procedures as of March 31, 2022. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective, ~~as of June 30, 2021,~~ due solely to the material weakness in our internal control over financial reporting ~~described in Item 4. Controls~~related to the Company’s accounting for complex financial instruments such as warrants and ~~Procedures included in our Quarterly Report on Form 10-Q as filed with the SEC on May 24, 2021. In light~~redeemable shares issued and timely accruing of ~~this material weakness,~~expenses. As a result, we performed additional analysis as deemed necessary to ensure that our ~~unaudited interim~~ financial statements were prepared in accordance with U.S. ~~generally accepted accounting principles.~~GAAP. Accordingly, management believes that the financial statements included in this Quarterly Report ~~on Form 10-Q~~ present fairly in all material respects our financial position, results of operations and cash flows for the ~~period~~periods presented.
Management has implemented remediation steps to improve our internal control over financial reporting. Specifically, we expanded and improved our review process for complex securities and related accounting standards. We plan to further improve this process by enhancing access to accounting literature, identification of third-party professionals with whom to consult regarding complex accounting applications and consideration of additional staff with the requisite experience and training to supplement existing accounting professionals.
Changes in Internal Control Over Financial Reporting
~~Other than the implementation of the material weakness remediation activities described below, during the most recently completed fiscal quarter, there has been~~There were no ~~change~~changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) ~~under~~of the Exchange Act) during the most recent fiscal quarter that ~~has~~have materially affected, or isare reasonably likely to materially affect, our internal control over financial reporting, with the exception below.
Our Chief Executive Officer and Chief Financial Officer performed additional accounting and financial analyses and other post-closing procedures including consulting with subject matter experts related to the accounting for the complex financial instruments. Our management has expended, and will continue to expend, a substantial amount of effort and resources for the remediation and improvement of our internal control over financial reporting. ~~Management has enhanced our~~While we have processes to properly identify and ~~appropriately apply applicable~~evaluate the appropriate accounting ~~requirements~~technical pronouncements and other literature for all significant or unusual transactions, we have expanded and will continue to ~~better evaluate and understand~~improve these processes to ensure that the nuances of such transactions are effectively evaluated in the context of the increasingly complex accounting standards that apply to our financial statements to address the material weakness. Our updated processes include providing enhanced access to accounting literature, research materials and documents and increased communication among our personnel and third-party professionals with whom we consult regarding complex accounting applications. The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects.standards.

2324

Table of Contents

PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None.

Item 1A. Risk Factors.
~~Not required for~~As a smaller reporting ~~company.~~company, we are not required to include risk factors in this Quarterly Report. However, as of the date of this ~~report,~~Quarterly Report, other than as set forth below, there have been no material changes ~~from the~~with respect to those risk factors previously disclosed in our (i) final prospectus dated January 7, 2021, as filed with the SEC on January ~~11,~~1, 2021 ~~our Annual Report on Form 10-K for the year ended December 31, 2021 as filed with the SEC on March 31, 2021 and our~~(the “Final Prospectus”), (ii) Quarterly Report on Form 10-Q for the ~~quarter~~quarterly period ended March 31, 2021 as filed with the SEC on May 24, ~~2021.~~2021 (the “2021 Q1 10-Q”), (iii) Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2021 as filed with the SEC on November 22, 2021 and (iv) 2021 Annual Report. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.
Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial Business Combination and results of operations.
We are subject to laws and regulations enacted by national, regional and local governments. We will be required to comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our ability to negotiate and complete our initial Business Combination and results of operations.
On March 30, 2022, the SEC issued proposed rules relating to, among other items, disclosures in business combination transactions involving SPACs (as defined below) and private operating companies; the financial statement requirements applicable to transactions involving shell companies; the use of projections in SEC filings in connection with proposed business combination transactions; the potential liability of certain participants in proposed business combination transactions; and the extent to which special purpose acquisition companies (“SPACs”) could become subject to regulation under the Investment Company Act, including a proposed rule that would provide SPACs a safe harbor from treatment as an investment company if they satisfy certain conditions that limit a SPAC’s duration, asset composition, business purpose and activities. These rules, if adopted, whether in the form proposed or in a revised form, may increase the costs of and the time needed to negotiate and complete an initial Business Combination, and may constrain the circumstances under which we could complete an initial Business Combination.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None. For a description of the use of the proceeds generated in our IPO, see Part I,II, Item 2 ~~of this report.~~in the 2021 Q1 10-Q. There has been no material change in the planned use of the proceeds from our IPO and private placement as is described in ~~our final prospectus dated January 7, 2021 and filed with~~ the ~~SEC on January 11, 2021.~~
Final Prospectus.
Item 3. Defaults Upon Senior Securities.
None.

Item 4. Mine Safety Disclosures.
Not Applicable.

Item 5. Other Information.
None.

Table of Contents

2426

Table of Contents

Item 6. Exhibits
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly ~~Report on Form 10-Q.~~Report.

Exhibit No.

Description
~~3.1~~

~~Amended and Restated Certificate of Incorporation. (1)~~
~~3.2~~

~~Bylaws. (2)~~
~~4.1~~

~~Warrant Agreement, dated January 7, 2021, by and between the company and Continental Stock Transfer & Trust Company, as warrant agent. (1)~~
31.1

Certification of the Principal Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a).*
31.2

Certification of the Principal Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a).*
32.1

Certification of the Principal Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350*1350.**
32.2

Certification of the Principal Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350*1350.**
101.INS*

Inline XBRL Instance Document
101.SCH*

Inline XBRL Taxonomy Extension Schema Document
101.CAL*

Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*

Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*

Inline XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*

Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*

Cover Page Interactive Data File––the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

*
Filed herewith.
**
Furnished herewith.

~~(1)~~
~~Incorporated by reference to the company’s Form 8-K, filed with the SEC on January 12, 2021.~~
~~(2)~~
~~Incorporated by reference to the company’s Form S-1, filed with the SEC on December 16, 2020.~~

2527

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: ~~August 20, 2021~~May 23, 2022

KL Acquisition Corp

By:
/s/ Doug Logigian

Name:
Doug Logigian

Title:
Chief Executive Officer

(Principal Executive Officer)

By:
/s/ Richard Gumer

Name:
Richard Gumer

Title:
Chief Financial Officer and Secretary

(Principal Financial and Accounting Officer)

2628


	Three Months		Six Months
	Ended		Ended
	June 30, 2021		June 30, 2021
	(Unaudited)		(Unaudited)
Redeemable Class A Common Stock
Numerator: Earnings allocable to Redeemable Class A Common Stock
Interest income on investments held in Trust Account	$	16,052	$	59,908
Amount available to pay franchise taxes		(16,052)		(59,908)
Net earnings	$	—	$	—
Denominator: Weighted average Redeemable Class A Common Stock
Basic and diluted weighted average shares outstanding, Redeemable Class A Common Stock		26,410,994		25,985,664
Basic and diluted net earnings per share, Redeemable Class A Common Stock	$	0.00	$	0.00
Non-Redeemable Class A and Class B Common Stock
Numerator: Net (loss) income minus net earnings
Net (loss) income	$	(4,667,277)	$	4,124,084
Net earnings		—		—
Non-redeemable net (loss) income	$	(4,667,277)	$	4,124,084
Denominator: Weighted average Non-Redeemable Class A and Class B Common Stock
Basic and diluted weighted average shares outstanding, Non-Redeemable Class A and Class B Common Stock		9,526,506		9,783,838
Basic and diluted net (loss) income per share, Non-Redeemable Class A and Class B Common Stock	$	(0.49)	$	0.42


	Level 1		Level 2		Level 3
Description							Level	March 31, 2022		December 31, 2021
Investment held in the Trust Account	$	287,559,908	$	—	$	—	1	$	287,598,643	$	287,569,685
Public Warrants	$	8,987,250	$	—	$	—	1	$	2,225,250	$	5,079,166
Private Warrants	$	—	$	—	$	4,859,016
Private Placement Warrants							3	$	1,237,945	$	2,751,628


	At March 31, 2022			December 31, 2021
Stock price	$	9.8		$	10.0
Strike price	$	11.50		$	11.50
Term (in years)		5.39			5.52
Volatility		4.0	%		10.0	%
Risk-free rate		2.42	%		1.31	%
Dividend yield		0.0	%		0.0	%


	At January 12, 2021
	(Initial Measurement)			At June 30, 2021
Stock price	$	9.95		$	9.70
Strike price	$	11.50		$	11.50
Term (in years)		6.00			5.00
Volatility		25.0	%		10.0	%
Risk-free rate		0.67	%		1.00	%
Dividend yield		0.0	%		0.0	%

Exhibit No.		Description
~~3.1~~		~~Amended and Restated Certificate of Incorporation. (1)~~
~~3.2~~		~~Bylaws. (2)~~
~~4.1~~		~~Warrant Agreement, dated January 7, 2021, by and between the company and Continental Stock Transfer & Trust Company, as warrant agent. (1)~~
31.1		Certification of the Principal Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a).*
31.2		Certification of the Principal Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a).*
32.1		Certification of the Principal Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 13501350.*
32.2		Certification of the Principal Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 13501350.*
101.INS*		Inline XBRL Instance Document
101.SCH*		Inline XBRL Taxonomy Extension Schema Document
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		Inline XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*		Cover Page Interactive Data File––the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

	KL Acquisition Corp

	By:	/s/ Doug Logigian
	Name:	Doug Logigian
	Title:	Chief Executive Officer
		(Principal Executive Officer)

	By:	/s/ Richard Gumer
	Name:	Richard Gumer
	Title:	Chief Financial Officer and Secretary
		(Principal Financial and Accounting Officer)