☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended Securities registered pursuant to Section 12(b) of the Act: Indicate by check mark whether the Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting 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 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the TABLE OF CONTENTS Class A Ordinary Shares Class B Ordinary Shares Additional Paid-in Accumulated Total The accompanying unaudited condensed consolidated financial statements Status: Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that 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. guidance in Topic 840. The •Liquor licenses:The Company records the fair value of brokered liquor licenses acquired in Business Combinations and Asset Acquisitions using the The Company The “fair market value” of the Class A September 30, Quoted Significant Significant The inputs). The key inputs into the Monte Carlo simulation as of March The following table sets forth a summary of designated, respectively, Class A related capital expenditures. We expect to As Off-Balance Sheet Arrangements As of Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Changes in Internal Control September 30, 2021March 27, 2022☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from toCommission File No. 001-40142ISOS ACQUISITION CORPORATION(Exact name of registrant as specified in its charter)Cayman IslandsDelaware 98-1632024 (State or other jurisdiction of
incorporation or organization) (I.R.S. Employer
Identification No.)55 Post Road West, Suite 200Westport, CT 06880(Address of Principal Executive Offices, including zip code)(203) 554-5641(Registrant’s telephone number, including area code)N/A(Former name, former address and former fiscal year, if changed since last report)Title of each class Trading Symbol(s) Name of each exchange on which registered Units, each consisting of one Class A Ordinary Share and one-third of one Redeemable WarrantISOS.UThe New York Stock ExchangeClass A Ordinary Shares,common stock, par value $0.0001 per share ISOSBOWL The New York Stock Exchange Redeemable Warrants, each whole warrant exercisable for one share of Class A Ordinary Sharecommon stock at an exercise price of $11.50ISOSBOWL WSThe New York Stock Exchange registrantregistrant: (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 ☐ company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”filer” and “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 companyAct.Act ☐Exchange Act):. Yes ☒☐ No ☐AsThe registrant had outstanding 111,184,028 shares of November 15, 2021, there were 25,483,700 Class A ordinarycommon stock (the “Class A common stock”), 55,911,203 shares par value $0.0001 per share, and 6,370,925of Class B ordinarycommon stock (“Class B common stock”), and 200,000 shares par value $0.0001 per share, of the registrantSeries A convertible preferred stock (the “Preferred Stock”), and 8,472,398 warrants issued and outstanding.ISOS ACQUISITION CORPORATIONFORM 10-Q FOR THE QUARTER ENDED September 30, 2021March 27,
2022June 27,
2021Assets Current assets: Cash and cash equivalents $ 172,977 $ 187,093 Accounts and notes receivable, net of allowance for doubtful accounts of $327 and $204, respectively 4,409 3,300 Inventories, net 10,056 8,310 Prepaid expenses and other current assets 11,668 8,056 Assets held-for-sale 14,506 686 Total current assets 213,616 207,445 Property and equipment, net 512,343 415,661 Internal use software, net 10,251 9,062 Property and equipment under capital leases, net 260,632 284,077 Intangible assets, net 93,192 96,057 Goodwill 738,787 726,156 Investment in joint venture 1,250 1,230 Other assets 41,491 42,550 Total assets $ 1,871,562 $ 1,782,238 Liabilities, Temporary Equity and Stockholders’ Deficit Current liabilities: Accounts payable $ 29,267 $ 29,489 Accrued expenses 80,113 63,650 Current maturities of long-term debt 4,944 5,058 Other current liabilities 6,876 9,176 Total current liabilities 121,200 107,373 Long-term debt, net 868,370 870,528 Long-term obligations under capital leases 394,708 374,598 Earnout liability 204,416 — Warrant liability 37,952 — Other long-term liabilities 56,991 87,749 Deferred income tax liabilities 14,346 11,867 Total liabilities 1,697,983 1,452,115 Temporary Equity Series A preferred stock - Old Bowlero — 141,162 ISOS ACQUISITION CORPORATIONSeries A preferred stock 200,489 — Redeemable Class A common stock - Old Bowlero — 464,827 Stockholders’ deficit: Class A common stock 11 10 Class B common stock 6 — Additional paid-in capital 296,790 — Treasury stock, at cost (1,026) — Accumulated deficit (319,794) (266,472) Accumulated other comprehensive loss (2,897) (9,404) Total stockholders’ deficit (26,910) (275,866) Total liabilities, temporary equity and stockholders’ deficit $ 1,871,562 $ 1,782,238 CONDENSED BALANCE SHEETS September 30,
2021 December 31,
2020 (unaudited) Assets Cash $ 1,215,849 $ — Prepaid expenses 205,477 — Deferred offering costs — 47,500 Total current assets 1,421,326 47,500 Marketable securities held in Trust Account 254,845,389 — Prepaid expenses, non-current 79,110 — Total Assets $ 256,345,825 $ 47,500 Liabilities and Shareholders’ (Deficit) Equity Current liabilities: Accrued offering costs and expenses $ 220,963 $ 5,000 Due to related party 1,000 — Promissory note - related party — 22,500 Total current liabilities 221,963 27,500 Forward Purchase Agreement liability 4,225,138 — Warrant liability 19,233,202 — Deferred underwriting fees 8,919,295 — Total liabilities 32,599,598 27,500 Commitments and Contingencies (Note 8) Class A ordinary shares subject to possible redemption, 25,483,700 shares and 0 shares at redemption value, at September 30, 2021 and December 31, 2020, respectively 254,844,389 — Shareholders’ (Deficit) Equity: Preference shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding — — Class A ordinary shares, $0.0001 par value; 300,000,000 shares authorized; 0 shares and 0 shares issued and outstanding (excluding 25,483,700 shares and 0 shares subject to possible redemption) at September 30, 2021 and December 31, 2020, respectively — — Class B ordinary shares, $0.0001 par value; 20,000,000 shares authorized; 6,370,925 shares and 6,468,750 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively 637 647 Additional paid-in capital — 24,353 Accumulated deficit (31,098,799 ) (5,000 ) Total shareholders’ (deficit) equity (31,098,162 ) 20,000 Total Liabilities and Shareholders’ (Deficit) Equity $ 256,345,825 $ 47,500 TheSee accompanying notes are an integral part of theseto unaudited condensed consolidated financial statements.Three Months Ended Nine Months Ended March 27,
2022March 28,
2021March 27,
2022March 28,
2021Revenues $ 257,820 $ 112,212 $ 643,988 $ 236,131 Costs of revenues 156,491 94,113 424,742 253,654 Gross profit (loss) 101,329 18,099 219,246 (17,523) Operating (income) expenses: Selling, general and administrative expenses 30,315 17,695 145,013 49,217 (Gain) loss on sale or disposal of assets (1,601) 64 (1,755) (77) Income from joint venture (127) (69) (285) (126) Management fee income (307) (25) (564) (132) Other operating expense 2,333 1,119 6,557 721 Business interruption insurance recoveries — — — (20,188) Total operating expense, net 30,613 18,784 148,966 29,415 Operating profit (loss) 70,716 (685) 70,280 (46,938) Other expenses: Interest expense, net 22,293 22,303 69,101 65,729 Change in fair value of earnout shares 45,778 — 23,236 — Change in fair value of warrant liability 20,678 — 20,748 — Other expense 161 — 161 — Total other expense, net 88,910 22,303 113,246 65,729 Loss before income tax (benefit) expense (18,194) (22,988) (42,966) (112,667) Income tax (benefit) expense (207) 103 (6,089) 333 Net loss $ (17,987) $ (23,091) $ (36,877) $ (113,000) Series A preferred stock dividends (2,818) (2,012) (7,290) (5,998) Net loss attributable to common stockholders $ (20,805) $ (25,103) $ (44,167) $ (118,998) Net loss per share attributable to Class A and B common stockholders, basic and diluted $ (0.13) $ (0.17) $ (0.29) $ (0.81) Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted 162,590,921 146,848,329 152,731,385 146,848,329 Three Months Ended Nine Months Ended March 27,
2022March 28,
2021March 27,
2022March 28,
2021Net loss $ (17,987) $ (23,091) $ (36,877) $ (113,000) Other comprehensive income (loss), net of income tax: Unrealized gain (loss) on derivatives 97 (47) 55 (330) Reclassification to earnings 2,205 2,266 6,610 6,798 Foreign currency translation adjustment 214 78 (158) 789 Other comprehensive income 2,516 2,297 6,507 7,257 Total comprehensive loss $ (15,471) $ (20,794) $ (30,370) $ (105,743) Accumulated Total Redeemable Class A Series A Class A Class B Treasury Additional other stockholders’ common stock preferred stock Common stock Common stock Stock paid-in Accumulated comprehensive equity Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount capital deficit loss (deficit) Balance, June 28, 2020 2,069,000 $ 160,601 106,378 $ 133,147 3,842,428 $ 1 — $ — — $ — $ 271,776 $ (102,701) $ (19,012) $ 150,064 Retroactive application of recapitalization 49,328,025 — 2,536,209 — 91,608,875 9 — — — — — (9) — — Adjusted balance, beginning of period 51,397,025 160,601 2,642,587 133,147 95,451,303 10 — — — — 271,776 (102,710) (19,012) 150,064 Net loss — — — — — — — — — — — (40,772) — (40,772) Foreign currency translation adjustment — — — — — — — — — — — — 216 216 Unrealized loss on derivatives — — — — — — — — — — — — (156) (156) Reclassification to earnings — — — — — — — — — — — — 2,266 2,266 Accrued dividends on pre-merger Series A preferred stock — — — 2,026 — — — — — — (2,026) — — (2,026) Stock based compensation — — — — — — — — — — 849 — — 849 Balance, September 27, 2020 51,397,025 160,601 2,642,587 135,173 95,451,303 10 — — — — 270,599 (143,482) (16,686) 110,441 Net loss — — — — — — — — — — — (49,137) — (49,137) Foreign currency translation adjustment — — — — — — — — — — — — 495 495 Unrealized loss on derivatives — — — — — — — — — — — — (127) (127) Reclassification to earnings — — — — — — — — — — — — 2,266 2,266 Accrued dividends on pre-merger Series A preferred stock — — — 1,960 — — — — — — (1,960) — — (1,960) Stock based compensation — — — — — — — — — — 696 — — 696 Balance, December 27, 2020 51,397,025 160,601 2,642,587 137,133 95,451,303 10 — — — — 269,335 (192,619) (14,052) 62,674 Net loss — — — — — — — — — — — (23,091) — (23,091) Foreign currency translation adjustment — — — — — — — — — — — — 78 78 Unrealized loss on derivatives — — — — — — — — — — — — (47) (47) Reclassification to earnings — — — — — — — — — — — — 2,266 2,266 Accrued dividends on pre-merger Series A preferred stock — — — 2,012 — — — — — — (2,012) — — (2,012) Stock based compensation — — — — — — — — 826 — — 826 Balance, March 28, 2021 51,397,025 $ 160,601 2,642,587 $ 139,145 95,451,303 $ 10 — $ — — $ — $ 268,149 $ (215,710) $ (11,755) $ 40,694 Balance, June 27, 2021 (retroactively stated for application of recapitalization) 51,397,025 $ 464,827 2,642,587 $ 141,162 95,451,303 $ 10 — $ — — $ — $ — $ (266,472) $ (9,404) $ (275,866) Net income — — — — — — — — — — — 15,564 — 15,564 Foreign currency translation adjustment — — — — — — — — — — — — (164) (164) Unrealized loss on derivatives — — — — — — — — — — — — (32) (32) Reclassification to earnings — — — — — — — — — — — — 2,202 2,202 Accrued dividends on pre-merger Series A preferred stock — — — 2,251 — — — — — — (2,251) — — (2,251) Change in fair value of redeemable Class A common stock of Old Bowlero — 14,995 — — — — — — — — (14,995) — — (14,995) Stock based compensation — — — — — — — — — — 801 — — 801 Reclass of negative APIC to accumulated deficit — — — — — — — — — — 16,445 (16,445) — — Balance, September 26, 2021 51,397,025 479,822 2,642,587 143,413 95,451,303 10 — — — — — (267,353) (7,398) (274,741) Net loss — — — — — — — — — — — (34,454) — (34,454) Foreign currency translation adjustment — — — — — — — — — — — — (208) (208) Unrealized loss on derivatives — — — — — — — — — — — — (10) (10) Reclassification to earnings — — — — — — — — — — — — 2,203 2,203 Accrued dividends on pre-merger Series A preferred stock — — — 1,885 — — — — — — (1,885) — — (1,885) Change in fair value of redeemable Class A common stock of Old Bowlero — 23,869 — — — — — — — — (23,869) — — (23,869) Merger induced stock based compensation — — — — 2,529,360 — 5,839,993 1 — — 42,555 — — 42,556 Issuance of common stock and preferred stock in connection with Merger Capitalization, net of Bowlero equity issuance costs and fair value of liability-classified warrants and earnout — — 95,000 95,000 42,185,233 4 1,074,185 — — — 120,805 — — 120,809 Settlement of pre-merger Series A preferred stock — — (2,642,587) (145,298) — — — — — — — — — — Conversion of Class A common stock of Old Bowlero to Series A preferred stock — — 105,000 105,000 (10,499,900) (1) — — — — (104,999) — — (105,000) Consideration to existing shareholders of Old Bowlero — — — — (22,599,800) (2) — — — — (225,998) — — (226,000) Consideration paid to Old Bowlero optionholders — — — — — — — — — — (15,467) — — (15,467) Exchange of redeemable Class A common stock of Old Bowlero for Class B common stock (51,397,025) (503,691) — — — — 51,397,025 5 — — 503,686 — — 503,691 Balance, December 26, 2021 — — 200,000 200,000 107,066,196 11 58,311,203 6 — — 294,828 (301,807) (5,413) (12,375) Net loss — — — — — — — — — — — (17,987) — (17,987) Foreign currency translation adjustment — — — — — — — — — — — — 214 214 Unrealized gain on derivatives — — — — — — — — — — — — 97 97 Reclassification to earnings — — — — — — — — — — — — 2,205 2,205 Accrual of paid-in-kind dividends on Series A preferred stock — — — 489 — — — — — — (489) — — (489) Repurchase of Class A common stock into Treasury stock — — — — (109,754) — — — 109,754 (1,026) — — — (1,026) Stock based compensation — — — — 69,086 — — — — — 2,451 — — 2,451 Balance, March 27, 2022 — $ — 200,000 $ 200,489 107,025,528 $ 11 58,311,203 $ 6 109,754 $ (1,026) $ 296,790 $ (319,794) $ (2,897) $ (26,910) Nine Months Ended March 27,
2022March 28,
2021Operating activities Net loss $ (36,877) $ (113,000) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 78,487 67,979 Gain on sale or disposal of assets, net (1,755) (77) Income from joint venture (285) (126) Loss on refinance of debt 953 — Loss on repurchase of warrants 161 — Amortization of deferred financing costs 2,769 2,529 Amortization of deferred rent incentive (281) 1,338 Non-cash interest expense on capital lease obligation 4,514 4,603 Amortization of deferred sale lease-back gain (770) (770) Deferred income taxes (6,587) — Stock based compensation 46,376 2,371 Distributions from joint venture 265 122 Change in fair value of earnout liability 23,236 — Change in fair value of warrant liability 20,748 — Changes in assets and liabilities, net of business acquisitions: Accounts receivable and notes receivable, net 23 2,563 Inventories (1,708) 460 Prepaids, other current assets and other assets (5,723) 594 Accounts payable and accrued expenses 10,777 23,608 Other current liabilities 4,265 5,101 Other long-term liabilities 4,273 19,828 Net cash provided by operating activities 142,861 17,123 Investing activities Purchases of property, equipment, and internal use software (135,548) (26,598) Proceeds from sale of property and equipment 6,160 482 Proceeds from sale of intangibles — 60 Purchases of intangible assets (2,602) — Acquisitions, net of cash acquired (46,754) (2,132) Net cash used in investing activities (178,744) (28,188) Financing activities Repurchase of Series A preferred stock - Old Bowlero (145,298) — Proceeds from issuance of Series A preferred stock 95,000 — Proceeds from issuance of Class A common stock to Isos investors 94,413 — Transaction costs related to Merger recapitalization (20,670) — Proceeds from PIPE Investment 150,604 — Proceeds from Forward Investment 100,000 — Payment to existing shareholders of Old Bowlero (226,000) — Consideration paid to existing option holders of Old Bowlero (15,467) — Repurchase of treasury stock (1,026) — Repurchase of warrants (5,382) — Payment of long-term debt (6,158) (6,158) Payment of First Lien Credit Facility Revolver (39,853) — Proceeds from Incremental Liquidity Facility — 45,000 Payment of Incremental Liquidity Facility (45,000) — Proceeds from New Revolver 86,434 — Payment of deferred financing costs (977) (1,984) Construction allowance receipts 1,132 — Net cash provided by financing activities 21,752 36,858 Effect of exchange rates on cash 15 71 Net (decrease) increase in cash and equivalents (14,116) 25,864 Cash and cash equivalents at beginning of period 187,093 140,705 Cash and cash equivalents at end of period $ 172,977 $ 166,569 Note 1 Note 2 Note 3 Note 4 Note 5 Note 6 Note 7 Note 8 Note 9 Note 10 Note 11 Note 12 Note 13 Note 14 Note 15 Note 16 Note 17 Note 18 Note 19 Note 20 Note 21 ISOS ACQUISITION CORPORATION
CONDENSED STATEMENTS OF OPERATIONS(Unaudited) Three months
ended
September 30,
2021 Nine months
ended
September 30,
2021 General and administrative expenses $ 785,494 $ 1,260,847 Loss from Operations (785,494 ) (1,260,847 ) Other income (expense): Trust interest income 3,848 7,389 Warrant issuance costs - (638,847 ) Unrealized loss on change in fair value of FPA (2,208,594 ) (3,667,048 ) Unrealized loss on change in fair value of warrants (5,266,872 ) (811,507 ) Total other expense (7,471,618 ) (5,110,013 ) Net loss $ (8,257,112 ) $ (6,370,860 ) Basic and diluted weighted average shares outstanding, ordinary share subject to redemption 25,483,700 19,454,853 Basic and diluted net loss per ordinary share $ (0.26 ) $ (0.26 ) Basic and diluted weighted average shares outstanding, ordinary share 6,370,925 6,182,395 Basic and diluted net loss per ordinary share $ (0.25 ) $ (0.25 ) The accompanying notesBowlero Corp., a Delaware corporation, and its subsidiaries (Bowlero Corp. and subsidiaries are an integral partreferred to collectively as “we,” “our,” the “Company,” “Bowlero Corp.” or “Bowlero”) are the world’s largest operator of these unaudited condensed financial statements.ISOS ACQUISITION CORPORATIONCONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)(unaudited)
Shareholders’ Equity Shares Amount Shares Amount Capital Deficit (Deficit) Balance as of December 31, 2020 - $ - 6,468,750 $ 647 $ 24,353 $ (5,000 ) $ 20,000 Sale of 22,500,000 Units through initial public offering 22,500,000 2,250 - - 224,997,750 - 225,000,000 Sale of 2,983,700 Units through over-allotment 2,983,700 298 - - 29,836,702 - 29,837,000 Sale of 5,397,828 Private Placement Warrants to Sponsor in private placement - - - - 8,096,742 - 8,096,742 Underwriting fee - - - - (5,096,742 ) - (5,096,742 ) Deferred underwriting fee - - - - (8,919,295 ) - (8,919,295 ) Offering costs charged to the shareholders’ equity - - - - (479,680 ) - (479,680 ) Initial classification of warrant liability - - - - (18,421,695 ) - (18,421,695 ) Reclassification of offering costs related to warrants - - - - 638,847 - 638,847 Initial classification of FPA liability - - - - (53,954 ) - (53,954 ) Forfeiture of founder shares - - (97,825 ) (10 ) 10 - - Net loss - - - - - (916,888 ) (916,888 ) Change in Class A ordinary shares subject to possible redemption (25,483,700 ) (2,548 ) - - (230,623,038 ) (24,211,414 ) (254,837,000 ) Balance as of March 31, 2021 (restated) - $ - 6,370,925 $ 637 $ - $ (25,133,302 ) $ (25,132,665 ) Net income - - - - - 2,803,140 2,803,140 Change in Class A ordinary shares subject to possible redemption - - - - - (3,541 ) (3,541 ) Balance as of June 30, 2021 (restated) - $ - 6,370,925 $ 637 $ - $ (22,333,703 ) $ (22,333,066 ) Net loss - - - - - (8,257,112 ) (8,257,112 ) Initial classification of FPA liability - - - - (504,136 ) - (504,136 ) Change in Class A ordinary shares subject to possible redemption - - - - 504,136 (507,984 ) (3,848 ) Balance as of September 30, 2021 - $ - 6,370,925 $ 637 $ - $ (31,098,799 ) $ (31,098,162 ) The accompanying notes are an integral part of these unaudited condensed financial statements.ISOS ACQUISITION CORPORATIONCONDENSED STATEMENT OF CASH FLOWS For the
nine months ended
September 30,
2021 (unaudited) Cash flows from Operating Activities: Net loss $ (6,370,860 ) Adjustments to reconcile net loss to net cash used in operating activities: Trust interest income (7,389 ) Unrealized loss on change in fair value of FPA 3,667,048 Unrealized gain on change in fair value of warrants 811,507 Warrant issuance costs 638,847 Changes in current assets and current liabilities: Prepaid assets (284,587 ) Accrued offering cost and expenses 366,230 Due to related party 1,000 Net cash used in operating activities (1,178,204 ) Cash Flows from Investing Activities: Investment held in Trust Account (254,838,000 ) Net cash used in investing activities (254,838,000 ) Cash flows from Financing Activities: Proceeds from Initial Public Offering, net of underwriters’ fees 249,740,258 Proceeds from private placement 8,096,742 Repayment of promissory note to related party (125,267 ) Payments of offering costs (479,680 ) Net cash provided by financing activities 257,232,053 Net change in cash 1,215,849 Cash, beginning of the period - Cash, end of the period $ 1,215,849 Supplemental disclosure of noncash investing and financing activities: Deferred underwriting commissions charged to additional paid in capital $ 8,919,295 Initial value of Class A ordinary shares subject to possible redemption $ 254,837,000 Change in value of Class A ordinary shares subject to possible redemption $ 7,389 Forfeiture of founder shares $ 10 Deferred offering costs paid by Sponsor loan $ 102,767 Initial classification of warrant liability $ 18,421,695 Initial classification of FPA liability $ 558,090 The accompanying notes are an integral part of these unaudited condensed financial statements.ISOS ACQUISITION CORPORATIONNOTES TO CONDENSED FINANCIAL STATEMENTSNote 1 - Organization and Business OperationsOrganization and GeneralIsos Acquisition Corporation (the “Company”) was incorporated as a Cayman Islands exempted company on December 29, 2020. The Company was incorporatedoperates bowling centers under different brand names. The AMF branded centers are traditional bowling centers and the Bowlmor and Bowlero branded centers offer a more upscale entertainment concept with lounge seating, enhanced food and beverage offerings, and more robust customer service for individuals and group events. Additionally, within the purposebrands, there exists a spectrum where some AMF branded centers are more upscale and some Bowlero branded centers are more traditional. All of effectingour centers, regardless of branding, are managed in a merger, share exchange, asset acquisition, share purchase, reorganization or similarfully integrated and consistent basis since all of our centers are in the same business of operating bowling entertainment. The following summarizes the Company’s centers by country and major brand as of March 27, 2022 and June 27, 2021:March 27,
2022June 27,
2021AMF & other 147 136 Bowlmor 2 14 Bowlero 160 133 Total centers in the United States 309 283 Mexico (AMF) 6 6 Canada (AMF and Bowlero) 2 2 Total 317 291 with one or more businesses or entities (the “Business Combination”). On July 1, 2021, pursuant to the Company entered into a business combination agreement (the “BCA”) withdated as of July 1, 2021, by and among the Old Bowlero and Isos Acquisition Corporation (“Isos”). Old Bowlero refers to Bowlero Corp. (“Bowlero”) pursuant to which Bowlero will merge with and into the Company (as described below).The Company’s sponsor is Isos Acquisition Sponsor LLC, a Delaware limited liability company (the “Sponsor”).The Company has selected December 31 as its fiscal year end.As of September 30, 2021, the Company had not commenced any operations. All activity for the period from December 29, 2020 (inception) through September 30, 2021 relatesprior to the Company’s formation andClosing Date.Initial Public Offering (“IPO”) described below, and, since the closing of the IPO, the search for a prospective Business Combination and its negotiationlegal form of the Business Combination Agreement. The Company will not generate any operating revenues until afterpursuant to the completion of its initial 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 and will recognize changes in the fair value of warrant liability and FPA as other income (expense).On July 1, 2021, the Company (which shall transfer by way of continuation to and domesticate as a Delaware corporation) entered intoBCA, the Business Combination Agreement withis accounted for as a reverse recapitalization. Under this method of accounting, Isos is treated as the acquired company and Old Bowlero is treated as the world’s largest owneracquirer for accounting and operator of bowling centers as well as ownerfinancial statement reporting purposes.Professional Bowlers Association. Followingfollowing facts and circumstances:Company willpredecessor and legal successor to the Company. The historical operations of Old Bowlero are deemed to be renamed “Bowlero”those of the Company. Thus, the financial statements included in this report reflect (i) the historical operating results of Old Bowlero prior to the Business Combination, (ii) the combined results of the Old Bowlero and itsIsos following the Business Combination on December 15, 2021, (iii) the assets and liabilities of Old Bowlero at their historical cost and (iv) the Company’s post-merger equity structure for all periods presented. The recapitalization of the number of shares of common stock and warrants are expectedpreferred stock attributable to remainthe purchase of Bowlero Corp. in connection with the Business Combination is reflected retroactively to the earliest period presented and is utilized for calculating earnings per share in all prior periods presented. No step-up basis of intangible assets or goodwill was recorded in the Business Combination transaction consistent with the treatment of the transaction as a reverse recapitalization of Isos.new ticker symbol “BOWL”BOWL and “BOWL WS”,warrants to purchase the Class A common stock are listed on the NYSE under the symbol BOWL.WS in lieu of the Isos ordinary shares and Isos’s warrants, respectively. TheIsos’ units automatically separated into the Isos ordinary shares and Isos’ warrants and ceased trading separately on the NYSE following the Closing Date. Prior to the Business Combination, is structuredIsos neither engaged in any operations nor generated any revenue. Until the Business Combination, based on Isos’ business activities, it was a shell company as a mergerdefined under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).Bowlero,corresponding capital amounts and losses per share, prior to the reverse recapitalization, have been retroactively restated based on shares reflecting the exchange ratio of 24.841 established in the BCA.Bowlero merging withaccounting principles generally accepted in the United States ("GAAP") and intoapplicable rules and regulations of the Company,SEC regarding interim financial reporting. Certain information and note disclosures normally included in annual financial statements have been condensed or omitted pursuant to such rules and regulations. Therefore, these interim condensed consolidated financial statements should be read in conjunction with the Company surviving, following the Company domesticatingaudited consolidated financial statements and related notes of Bowlero Corp. as a Delaware corporation. Bowlero’s stockholders will receive, as consideration for the Business Combination, a mix of cash, shares of the Company’s common stockJune 27, 2021 and shares of the Company’s preferred stock.FinancingThe registration statement for the Company’s IPO was declared effective on March 2, 2021 (the “Effective Date”). On March 5, 2021, the Company consummated the IPO of 22,500,000 units (the “Units” and, with respect to the ordinary sharesJune 28, 2020 included in the Units being offered, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $225,000,000, which is discussed in Note 4, and incurred $4,500,000 in cash underwriting fees and $7,875,000 in deferred underwriting fees.Simultaneously with the closing of the IPO, the Company consummated the sale of 5,000,000 warrants (the “Private Placement Warrants”) at a price of $1.50 per Private Placement Warrant in a private placement to the Sponsor and LionTree Partners LLC, generating gross proceeds of $7,500,000, which is discussed in Note 5.The Company granted the underwriters in the IPO a 45-day option to purchase up to 3,375,000 additional Units to cover over-allotments, if any. On March 10, 2021, the underwriters partially exercised the over-allotment option to purchase 2,983,700 Units (the “Over-allotment Units”), generating an aggregate of gross proceeds of $29,837,000, and incurred $596,742 in cash underwriting fees and $1,044,295 in deferred underwriting fees.Transaction costs amounted to $14,495,717 consisting of $5,096,742 of underwriting fees, $8,919,295 of deferred underwriting fees, and $479,680 of other offering costs.Trust AccountFollowing the closing of the IPO on March 5, 2021 and the underwriters’ partial exercise of their over-allotment option on March 10, 2021, $254,837,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the IPO and the sale of the Private Placement Warrants and $1,000 overfunded by the Sponsor was placed in a Trust Account, which can only be invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations. $1,000 was overfunded by the Sponsor. The Trust Account is intended as a holding place for funds pending the earliest to occur of either: (i) the completion of the initial Business Combination; (ii) the redemption of any public shares properly tendered in connection with a shareholder vote to amend the Company’s amended and restated memorandum and articles of association (A) to modify the substance or timing of the Company’s obligation to provide holders of the Class A ordinary shares the right to have their shares redeemed in connection with the initial Business Combination or to redeem 100% of the public shares if the Company does not complete the initial Business Combination within 24 months from the closing of the IPO (the “Combination Period”) or (B) with respect to any other provision relating to the rights of holders of the Class A ordinary shares or pre-initial Business Combination activity, and (iii) the redemption of the public shares if the Company has not consummated an initial Business Combination within the Combination Period, subject to applicable law. Initial Business CombinationThe Company must complete one or more initial Business Combinations having an aggregate fair market value of at least 80% of the value of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the Trust Account) at the time of the agreement to enter into the initial Business Combination. However, the Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act 1940, as amended (the “Investment Company Act”). There is no assurance that the Company will be able to complete a Business Combination successfully.The Class A ordinary shares subject to redemption were recorded at a redemption value and classified as temporary equity upon the completion of the IPO, in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” In such case, the Company will proceed with a Business Combination if the Company seeks shareholder approval, a majority of the issued and outstanding shares voted are voted in favor of the Business Combination.If the Company is unable to complete the initial Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible, but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay income taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any), and (3) as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders and board of directors, liquidate and dissolve, subject in each case to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.The Sponsor and the Company’s founding team have entered into a letter agreement with the Company,final prospectus filed pursuant to which they have agreed to waive their redemption rights with respect to their founder shares (as described in Note 6) and any public shares purchased during or after the IPO in connection with (i) the completion of the initial Business Combination and (ii) a shareholder vote to approve an amendment to the amended and restated memorandum and articles of association (A) that would modify the substance or timing of the Company’s obligation to provide holders of the Class A ordinary shares the right to have their shares redeemed in connection with the initial Business Combination or to redeem 100% of the Company’s public shares if the Company does not complete the initial Business Combination within the Combination Period or (B) with respect to any other provision relating to the rights of holders of the Class A ordinary shares or pre-initial Business Combination activity. Additionally, the Sponsor has agreed to waive its rights to liquidating distributions from the Trust Account with respect to its founder shares if the Company fails to complete the initial Business Combination within the Combination Period (although they will be entitled to liquidating distributions from the Trust Account with respect to any public shares they hold if the Company fails to complete the initial Business Combination within the Combination Period). If the Company submits the initial Business Combination to the public shareholders for a vote, the Sponsor and each member of the founding team have agreed to vote their founder shares and any public shares purchased during or after the IPO in favor of the initial Business Combination.The Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party (excluding the Company’s independent registered public accounting firm) for services rendered or products sold to the Company, or a prospective partner business with which the Company has discussed entering into a transaction agreement, reduce the amounts in the Trust Account to below the lessor of (i) $10.00 per public share and (ii) the actual amount per share held in the Trust Account as of the date of the liquidation of the Trust Account if less than $10.00 per public share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay the Company’s tax obligations, provided that such liability will not apply to any claims by a third party or prospective partner business who executed a waiver of any and all rights to seek access to the Trust Account nor will it apply to any claims under the Company’s indemnity of the underwriters of the IPO against certain liabilities, including liabilitiesRule 424(b)(2) under the Securities Act of 1933, as amended (the “Securities Act”"Securities Act"). Moreover, in, with the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. SEC, on February 1, 2022.Company has not asked the Sponsor to reserve for such indemnification obligations, or has the Company independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and the Company believes that the Sponsor’s only assets are securities of the Company. The Sponsor may not be able to satisfy those obligations.Liquidity and Capital ResourcesAs of September 30, 2021, the Company had approximately $1.2 million in its operating bank account and working capital of approximately $1.2 million.Prior to the completion of the IPO, the Company’s liquidity needs had been satisfied through a capital contribution from the Sponsor of $25,000, to cover certain offering costs, for the purchase of founder shares (see Note 6), and a loan under an unsecured promissory note from the Sponsor of $125,267 (see Note 6). The promissory note from the Sponsor was paid in full on March 15, 2021. Subsequent to the consummation of the IPO and Private Placement, the Company’s liquidity needsunaudited interim condensed consolidated financial statements have been satisfied through the proceeds from the consummation of the Private Placement not held in the Trust Account.In addition, in order to finance transaction costs in connection with a Business Combination, the Company’s Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, provide the Company Working Capital Loans (see Note 6). To date, there were no amounts outstanding under any Working Capital Loans.Basedprepared on the foregoing, management believes thatsame basis as the Company will have sufficient working capital and borrowing capacity to meet its needs through the earlier of the consummation of a Business Combination or one year from this filing. Over this time period, the Company will be using these funds for paying existing accounts payable, paying for travel expenditures, and consummating the Business Combination with Bowlero.Risks and UncertaintiesManagement continues to evaluate the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations, cash flows and/or consummation of Bowlero transaction, the specific impact is not readily determinable as of the date of the condensed financial statements. The condensedaudited consolidated financial statements, do notand in management’s opinion, include any adjustments that might result from the outcome of this uncertainty.Note 2 — Restatement of Previously Issued Financial StatementsIn connection with the preparation of the Company’s financial statements as of September 30, 2021, management determined it should restate its previously reported financial statements. The Company previously determined the Class A ordinary shares subject to possible redemption to be equal to the redemption value of $10.00 per Class A ordinary share while also taking into consideration the requirement of the Company’s memorandum and articles of association that a redemption cannot result in net tangible assets being less than $5,000,001. Upon review of its financial statements for the period ended September 30, 2021, the Company reevaluated the classification of the Class A ordinary shares and determined that the Class A ordinary shares issued during the IPO and pursuant to the exercise of the underwriters’ over-allotment can be redeemed or become redeemable subject to the occurrence of future events considered outside the Company’s control under ASC 480-10-S99. Therefore, management concluded that the carrying value should include all Class A ordinary shares subject to possible redemption, resulting in the Class A ordinary shares subject to possible redemption being classified as temporary equity in its entirety. As a result, management has recorded a reclassification adjustment related to temporary equity and permanent equity. This resulted in an adjustment to the initial carrying value of the Class A ordinary shares subject to possible redemption with the offset recorded to additional paid-in capital (to the extent available), accumulated deficit and Class A ordinary shares.In connection with the change in presentation for the Class A ordinary shares subject to redemption, the Company also restated its earnings per share calculation to allocate net income (loss) pro rata to Class A and Class B ordinary shares. This presentation contemplates a Business Combination as the most likely outcome, in which case, both classes of ordinary shares share pro rata in the income (loss) of the Company.Other than a change in amounts classified in temporary and permanent equity and adjustments to earnings per share, there has been no other changes in the Company’s total assets, liabilities or operating results as a result of this reclassification.The impact of the restatement on the Company’s financial statements is reflected in the following table. As Previously
Reported Adjustments As Restated Balance Sheet at March 5, 2021 (audited) Class A ordinary shares subject to possible redemption $ 198,014,150 $ 26,985,850 $ 225,000,000 Class A ordinary shares 270 (270 ) - Additional paid-in capital 5,591,050 (5,591,050 ) - Accumulated deficit $ (591,962 ) $ (21,394,530 ) $ (21,986,492 ) Balance Sheet at March 31, 2021 Class A ordinary shares subject to possible redemption $ 224,704,330 $ 30,132,670 $ 254,837,000 Class A ordinary shares 301 (301 ) - Additional paid-in capital 5,920,955 (5,920,955 ) - Accumulated deficit $ (921,888 ) $ (24,211,414 ) $ (25,133,302 ) Statement of Operations for the three months March 31, 2021 Basic and diluted weighted average shares outstanding, ordinary shares subject to redemption 5,720,409 1,475,788 7,196,197 Basic and diluted net income (loss) per share $ 0.00 $ (0.07 ) $ (0.07 ) Basic and diluted weighted average shares outstanding, ordinary shares 7,846,713 (2,047,664 ) 5,799,049 Basic and diluted net loss per share $ (0.12 ) $ 0.05 $ (0.07 ) Statement of Cash Flows for the three months March 31, 2021 Initial value of Class A ordinary shares subject to possible redemption $ 198,014,150 $ 56,822,850 $ 254,837,000 Change in value of Class A ordinary shares subject to possible redemption $ 26,690,180 $ (26,690,180 ) $ - Balance Sheet at June 30, 2021 Class A ordinary shares subject to possible redemption $ 227,507,470 $ 27,333,071 $ 254,840,541 Class A ordinary shares 273 (273 ) - Additional paid-in capital 3,117,843 (3,117,843 ) - Accumulated deficit $ 1,881,252 $ (24,214,955 ) $ (22,333,703 ) Statement of Operations for the three months ended June 30, 2021 Basic and diluted weighted average shares outstanding, ordinary shares subject to redemption 22,470,433 3,013,267 25,483,700 Basic and diluted net income per share $ 0.00 $ 0.09 $ 0.09 Basic and diluted weighted average shares outstanding, ordinary shares 9,384,192 (3,013,267 ) 6,370,925 Basic and diluted net income per share $ 0.30 $ (0.21 ) $ 0.09 Statement of Operations for the six months ended June 30, 2021 Basic and diluted weighted average shares outstanding, ordinary shares subject to redemption 14,141,692 2,248,774 16,390,466 Basic and diluted net income per share $ 0.00 $ 0.08 $ 0.08 Basic and diluted weighted average shares outstanding, ordinary shares 8,619,700 (2,533,133 ) 6,086,567 Basic and diluted net income per share $ 0.22 $ (0.14 ) $ 0.08 Statement of Cash Flows for the six months ended June 30, 2021 Initial value of Class A ordinary shares subject to possible redemption $ 224,704,330 $ 30,132,670 $ 254,837,000 Change in value of Class A ordinary shares subject to possible redemption $ 2,803,140 $ (2,799,599 ) $ 3,541 Note 3 - Significant Accounting PoliciesBasis of PresentationThe accompanying unaudited condensed financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for financial information and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP. In the opinion of management, the unaudited condensed financial statements reflect all adjustments, which includeconsist of only normal recurring adjustments necessary for the fair statement of the balancesCompany’s condensed consolidated balance sheet as of March 27, 2022 and resultsthe related condensed statements of operations, comprehensive income (loss), temporary equity and stockholders' equity (deficit), and cash flows for the periods presented. Operatingthree and nine months ended March 27, 2022 and March 28, 2021. The results for the three and nine months ended September 30, 2021March 27, 2022 are not necessarily indicative of the results that may be expected through December 31, 2021.should be readinclude the accounts and operations of the Company. All intercompany accounts and transactions have been eliminated.conjunction withNote 7 - Property and Equipment to conform to current period presentation. Please refer to Note 8 – Internal Use Software for more information.statementsstatements. During the nine months ended March 27, 2022, there were no significant revisions to the Company’s significant accounting policies, other than those indicated herein.notes thereto includedimpacting production and sales across a wide range of industries. The full economic impact of this pandemic has not been determined, including the impact on the Company’s employees, suppliers, customers and credit markets. Due to the evolving and uncertain nature of COVID-19 pandemic, it is reasonably possible that it could materially impact the Company’s estimates, particularly those that require consideration of forecasted financial information, in the Form 8-Knear to medium term. The ultimate impact will depend on numerous evolving factors that the Company may not be able to accurately predict, including the duration and extent of the pandemic, the impact of federal, state, local and foreign governmental actions, and consumer behavior in response to the pandemic and other economic and operational conditions.final prospectus filedCompany’s statutory tax rate in the jurisdiction in which it will receive a deduction.SECexpected term of the option.March 12, 2021common stock. Since the Company has reported net losses for all periods presented, all potentially dilutive securities have been excluded from the calculation of the diluted net loss per share attributable to common stockholders as their effect is antidilutive and March 4, 2021, respectively.Status“JOBS Act”"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 and reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.Usepreparationmain objectives are to increase transparency and comparability among organizations by recognizing right-of-use assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The right-of-use asset reflects the lessee’s right to direct the use of these unaudited condensed financial statements in conformity with US GAAP requires managementand obtain substantially all the economic benefits from that asset over the lease term, and it will be based on the lease liability subject to certain adjustments such as accrued rent, lease incentives, lease intangibles, initial direct costs and prepaid rent. The lease liability reflects the obligation to make payments for the right to use that asset. Operating leases will retain a straight-line lease expense, and finance leases will retain their front-loaded expense pattern, similar to current capital leases.and assumptions that affectthis standard will result in a material impact to our balance sheet from the reported amountsrecognition of right of use assets and liabilities, but not to our statement of operations or cash flows.Three Months Ended Nine Months Ended March 27,
2022% March 28,
2021% March 27,
2022% March 28,
2021% Major revenue categories: Bowling $ 130,394 51 % $ 56,826 51 % $ 326,536 51 % $ 124,351 53 % Food and beverage 88,187 34 % 36,866 33 % 221,206 34 % 75,653 32 % Amusement 33,781 13 % 14,146 13 % 83,967 13 % 25,699 11 % Media 5,458 2 % 4,374 4 % 12,279 2 % 10,428 4 % Total revenues $ 257,820 100 % $ 112,212 100 % $ 643,988 100 % $ 236,131 100 % disclosurerecognized when earned.contingent assetsfood and liabilitiesbeverages at our bowling centers are recognized at a point-in-time.sheet. Actual results could differsheets as of March 27, 2022 and June 27, 2021, respectively.Three Months Ended Nine Months Ended March 27,
2022March 28,
2021March 27,
2022March 28,
2021Operating Leases Rent expense $ 8,041 $ 13,969 $ 39,979 $ 42,669 Capital Leases Interest expense 9,255 8,722 28,080 26,050 Amortization expense 3,003 3,049 9,313 9,300 Total Capital Lease Cost $ 12,258 $ 11,771 $ 37,393 $ 35,350 Operating
LeasesCapital
Leases Remainder of 2022 $ 16,003 $ 11,159 2023 46,450 40,879 2024 45,559 41,954 2025 47,031 42,146 2026 45,090 37,353 Thereafter 566,291 1,030,886 Total Rental Payments: $ 766,424 $ 1,204,377 Less imputed interest expense for capital leases: 809,526 Present value: $ 394,851 Recapitalization Cash-Isos Acquisition Corporation Trust $ 254,851 Less: Isos transaction costs paid from Trust (23,869) Less: Redemptions of existing shareholders of Isos (136,569) Net proceeds from SPAC shareholders 94,413 Cash-PIPE 150,604 Cash-PIPE preferred 95,000 Cash-Forward 100,000 Total Cash received 440,017 Less: Bowlero transaction costs (20,670) Total Cash received, net of Bowlero transaction costs 419,347 Earnout liability (181,113) Warrant liability (22,426) New equity, net 215,808 Less: Consideration payment to Bowlero shareholders (226,000) Less: Payoff of preferred stock and accumulated dividends (145,298) Less: Payments for stock options (15,467) Net distributions to existing shareholders (386,765) Net contribution from Business Combination and preferred financing $ (170,957) those estimates. Significantcertain current and former employees and the conversion of common shares to preferred shares, there were 165,378,145 shares of the Common Stock issued and outstanding as of the Closing Date, of which 107,066,302 shares were Class A common stock and 58,311,203 shares were Class B common stock. There were 17,225,692 warrants outstanding as of the Closing Date.estimatesintangibles, and property and equipment.forwardacquired assets and assumed liabilities. The Company obtains this information during due diligence and through other sources. The following table summarizes the purchase agreement liability andprice allocation for the warrant liability (see Note 7)Marketable securities held in Trust AccountAt September 30, 2021, the assets held in the Trust Account were substantially held in mutual funds comprised of U.S. Treasury Bills, classified as trading securities. Trading securities are presented on the balance sheet at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these securities are included in Trust interest income in the statement of operations. The estimated fair values of investments heldthe identifiable assets acquired, components of consideration transferred and the transactional related expenses.Identifiable assets acquired and liabilities assumed Business Combination Totals Current assets $ 2,510 Property and equipment 29,027 Identifiable intangible assets 3,080 Goodwill 12,763 Total assets acquired $ 47,380 Current liabilities (415) Total assumed liabilities (415) Total consideration transferred, net of cash acquired of $25 $ 46,965 Components of consideration transferred Cash $ 44,027 Holdback 1,468 Contingent consideration 1,470 Total $ 46,965 Transaction expenses included in “other operating expense” in the condensed consolidated statement of operations for the nine months ended March 27, 2022 $ 759 Trust Account are determined using available market information.Fair Value MeasurementsFair value is defined asapplicable accounting standards. The cost accumulation model requires us to measure all the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participantsacquired assets and assumed liabilities at the measurement date. GAAP establishes a three-tiertheir fair value hierarchy, which prioritizesand then adjust them based on the inputs used in measuring fair value.total consideration transferred. The hierarchy givesfollowing table summarizes 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;●Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and●Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.In some circumstances, the inputs used to measure fair value might be categorized within different levelsallocation of the fair value hierarchy. In those instances,amounts under a cost accumulation approach:Identifiable assets acquired and liabilities assumed Bowl
AmericaOther Asset Acquisition Total Current assets $ 2,949 $ 5 $ 2,954 Property and equipment 40,121 8,564 48,685 Identifiable intangible assets 1,099 1,136 2,235 Assets held for sale 10,985 — 10,985 Current liabilities (1,426) (81) (1,507) Deferred tax liability (9,107) — (9,107) Total consideration transferred $ 44,621 $ 9,624 $ 54,245 is categorizeddue to the use of unobservable inputs. Significant assumptions used in its entiretythe calculation include: revenue projections, a royalty rate based on qualitative factors and the market-derived royalty rates, discount rate based on the Company’s weighted average cost of capital ("WACC") adjusted for risks commonly inherent in trade names.hierarchycalculations for non-competition agreements include: potential competitor impact on revenue and expense projections, discount rate based on the lowest level input that is significant toCompany’s WACC adjusted for risks commonly inherent in intangible assets, specifically non-compete agreements.measurement.Company’s certain assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts representedmarket approach. Significant assumptions used in the balance sheet. The fair values of cash and cash equivalents, prepaid expenses, due to related party are estimated to approximate the carrying values as of September 30, 2021 due to the short maturities of such instruments.The Company’s Private Placement Warrants liability and forward purchase agreements (FPA) liability arecalculation include approximation based on a valuation model utilizing management judgmentrecent sales of liquor licenses in the respective jurisdictions and pricing inputs from observableassignment of an indefinite useful life as licenses do not expire and unobservable markets with less volume and transaction frequency than active markets. Significant deviations from these estimates and inputs could resultcan be sold to third parties.a material change in fair value.the event of certain decisions being made. The fairrange of contingent consideration is $0 - $1,470. We recorded the amount based on:warrant liability and FPA liability isnon-cash consideration.3. See Note 7 for additional information3 on assets and liabilities measured atthe fair value.Concentration of Credit RiskFinancial instruments that potentially subjectDeferred Tax Liability – Since the Bowl America acquisition was a non-taxable stock acquisition, the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceedrecorded deferred tax liabilities for the Federal Depository Insurance Coverage of $250,000. At September 30, 2021difference between the tax carryover basis and December 31, 2020, the Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.Ordinary Shares Subject to Possible RedemptionAllbook value of the 25,483,700 Class A ordinary shares sold as part of the Units in the IPO contain a redemption featureopening balances, which allows for the redemption of such public shares in connection with the Company’s liquidation or if there is a shareholder vote or tender offer in connection with the Business Combinationwere recorded and in connection with certain amendmentsallocated based on fair values to the Company’s amendedrespective assets acquired.restated memorandum and articles of association. 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 ordinary shares subject to redemption to be classified outside of permanent equity. Therefore, all Class A ordinary shares have been classified outside of permanent equity.Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid in capital togoodwill for the extent available and accumulated deficit.Balance as of June 27, 2021 $ 726,156 Goodwill resulting from acquisitions 12,631 Balance as of March 27, 2022 $ 738,787
Intangible Assets:March 27, 2022 June 27, 2021 Weighted average life
(in years)Gross carrying amount Accumulated amortization Net carrying amount Weighted average life
(in years)Gross carrying amount Accumulated amortization Net carrying amount Finite-lived intangible assets: AMF trade name 2 $ 9,900 $ (8,415) $ 1,485 1 $ 9,900 $ (7,920) $ 1,980 Bowlmor trade name 0 6,500 (6,500) — 6 6,500 (2,600) 3,900 Other acquisition trade names 5 1,610 (507) 1,103 7 1,010 (173) 837 Customer relationships 2 20,652 (13,017) 7,635 3 18,370 (10,471) 7,899 Management contracts 2 1,800 (1,366) 434 2 1,800 (1,150) 650 Non-compete agreements 4 1,921 (769) 1,152 4 1,200 (514) 686 PBA member, sponsor & media relationships 8 1,400 (456) 944 8 1,400 (322) 1,078 Other intangible assets 4 921 (217) 704 — — — $ 44,704 $ (31,247) $ 13,457 $ 40,180 $ (23,150) $ 17,030 Indefinite-lived intangible assets: Liquor licenses 9,735 — 9,735 9,027 — 9,027 PBA trade name 3,100 — 3,100 3,100 — 3,100 Bowlero trade name 66,900 — 66,900 66,900 — 66,900 79,735 — 79,735 79,027 — 79,027 $ 124,439 $ (31,247) $ 93,192 $ 119,207 $ (23,150) $ 96,057 Net Loss Per Ordinary Sharehas two classesreviewed the estimated useful life of shares, which are referred toits Bowlmor tradename as Class A ordinary shares and Class B ordinary shares. Earnings and losses are shared pro rata between the two classespart of shares. The 13,892,395 ordinary shares issuable upon exercise of outstanding warrants to purchase the Company’s shares were excludedplans to rebrand its Bowlmor centers to Bowlero centers. Based on that review, the Company determined that the intangible asset associated with the Company’s Bowlmor tradename has a useful life shorter than initially estimated. During the fiscal quarter ended December 26, 2021, the Company adjusted the remaining useful life of the Bowlmor tradename from diluted earnings per share5.75 years to 6 months. The change in useful life was made as a prospective adjustment and resulted in an increase in amortization expense of $1,706 and $3,412 for the three and nine months ended September 30,March 27, 2022, respectively.becauseproperty and equipment consists of:March 27,
2022June 27,
2021Land $ 71,723 $ 19,879 Buildings and improvements 53,974 16,155 Leasehold improvements 342,524 313,441 Equipment, furniture, and fixtures 359,782 315,719 Construction in progress 15,707 27,028 $ 843,710 $ 692,222 Accumulated depreciation (331,367) (276,561) Property and equipment, net of accumulated depreciation $ 512,343 $ 415,661 warrants are contingently exercisable,three and nine months ended March 27, 2022, and March 28, 2021, respectively:Three Months Ended Nine Months Ended March 27,
2022March 28,
2021March 27,
2022March 28,
2021Depreciation expense $ 20,578 $ 17,036 $ 55,525 $ 50,408 Capitalized internal use software Balance at June 27, 2021 Additions Balance at March 27, 2022 Internal use software, gross $ 20,420 $ 3,534 $ 23,954 Accumulated amortization (11,358) (2,345) (13,703) Internal use software, net $ 9,062 $ 1,189 $ 10,251 Three Months Ended Nine Months Ended March 27,
2022March 28,
2021March 27,
2022March 28,
2021Amortization expense $ 1,016 $ 625 $ 2,345 $ 1,712 March 27,
2022June 27,
2021Customer deposits $ 24,258 $ 7,114 Compensation 12,347 13,577 Taxes and licenses 10,465 9,646 Insurance 6,238 8,285 Deferred revenue 4,814 5,885 Deferred rent 3,950 4,384 Utilities 3,844 3,399 Interest 3,839 4,693 Professional fees 1,752 4,473 Other 8,606 2,194 Total accrued expenses $ 80,113 $ 63,650 March 27,
2022June 27,
2021First Lien Credit Facility Revolver $ — $ 39,853 First Lien Credit Facility Term Loan (Maturing July 3, 2024 and bearing variable rate interest; 4.50%nd 4.55% at March 27, 2022 and June 27, 2021, respectively, excluding impact of hedging) 794,376 800,534 Incremental Liquidity Facility — 45,000 New Revolver (Maturing April 4, 2024) 86,434 — $ 880,810 $ 885,387 Less: Unamortized financing costs (7,496) (9,800) Current portion of unamortized financing costs 3,267 3,152 Current maturities of long-term debt (8,211) (8,211) Total long-term debt $ 868,370 $ 870,528 contingencies have not yet been met. Aslenders.result, diluted net loss per ordinary share$140,000 senior secured revolving credit facility (“New Revolver”), which has a maturity date of the earlier of December 15, 2026 or the date that is 90 days prior to the same as basic net loss per ordinary sharescheduled maturity date of any term loans outstanding under the First Lien Credit Agreement in an aggregate principal amount exceeding $175,000. Since the term loan under the First Lien Credit Agreement matures on July 3, 2024, the maturity date for the periods presented. The table below presentsNew Revolver is currently April 4, 2024. Interest on borrowings under the New Revolver is initially based on either the Adjusted Term Secured Overnight Financing Rate (“SOFR”) or the Alternate Base Rate, as further described in the First Lien Credit Agreement.reconciliationSeventh Amendment (“Seventh Amendment”) to the First Lien Credit Agreement pursuant to which the total revolving commitments under the New Revolver were increased by $25,000 to an aggregate amount of $165,000. No changes, other than increasing the aggregate principal amount of revolving commitments thereunder, were made to the terms of the numerator and denominator used to compute basic and diluted net loss per share for each class of ordinary shares: For the Three Months Ended
September 30, 2021 For the Nine Months Ended
September 30, 2021 Class A Class B Class A Class B Basic and diluted net loss per share: Numerator: Allocation of net loss $ (6,605,690 ) $ (1,651,422 ) $ (4,834,534 ) $ (1,536,326 ) Denominator: Weighted-average shares outstanding 25,483,700 6,370,925 19,454,853 6,182,395 Basic and diluted net loss per share $ (0.26 ) $ (0.26 ) $ (0.25 ) $ (0.25 ) Offering Costs associatedNew Revolver in connection with the Initial Public Offeringcomplieswas in compliance with all debt covenants as of March 27, 2022.requirementsnine months ended March 27, 2022 is 14%. The difference between the US federal statutory rate of 21% and the ASC 340-10-S99-1 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 relatedyear-to-date effective tax rate is mainly due to the IPO and were charged to shareholders’ equity upon the completion of the IPO. Offering costs are allocated to the separable financial instruments issued in the IPO based on a relative fair value basis compared to total proceeds received. Offering costs associated with warrant liabilities are expensed, and offering costs associated with the Class A ordinary shares are charged to shareholders’ equity.Derivative Financial InstrumentsThe Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging”. Derivative instruments are recorded at fair value on the grant date and re-valued at each reporting date, withcurrent year changes in the fair value reportedvaluation allowance partially offset by state income taxes. The effective tax rate for the nine months ended March 28, 2021 is 0% and differs from the US federal statutory rate of 21% primarily due to income tax expense being offset by changes in the statements of operations. Derivative assets and liabilities are classified on the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. The Company has determined the warrants are a derivative instrument.FASB ASC 470-20, Debt with Conversion and Other Options addresses the allocation of proceeds from the issuance of convertible debt into its equity and debt components. The Company applies this guidance to allocate IPO proceeds from the Units between Class A ordinary shares and warrants, using the residual method by allocating IPO proceeds first to fair value of the warrants and then the Class A ordinary shares.Income TaxesThe Company accounts for income taxes under FASB ASC 740, “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. Based on the Company’s evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company’s financial statements. Since the Company was incorporated on December 29, 2020, the evaluation was performed for upcoming 2021 tax year which will be the only period subject to examination.The Company recognizes accrued interest(12)Commitments and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefitsContingenciesno amounts accrued for interest and penalties as of September 30, 2021 and December 31, 2020.Claims: The Company is currently, and from time to time may be, subject to claims and actions arising in the ordinary course of its business, including general liability, fidelity, workers’ compensation, employment claims, and Americans with Disabilities Act ("ADA") claims. The Company has insurance to cover general liability and workers’ compensation claims and reserves for claims and actions in the ordinary course. The insurance is subject to a self-insured retention. In some actions, plaintiffs request punitive or other damages that may not aware of any issues under review that could resultbe covered by insurance.significant payments, accruals or material deviation from its position.There is currently no taxation imposed on income by the Government of the Cayman Islands. In accordance with Cayman federal income tax regulations, income taxes are not levied on the Company.Recent Accounting PronouncementsIn August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity(Subtopic 815-40): 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 GAAP. The ASU also removes certain settlement conditionsaggregate that are required for equity-linked contractsexpected to qualify for scope exception, and it simplifies the diluted earnings per share calculation in certain areas. The Company continues to evaluate thehave a material adverse impact of the adoption of the ASU on the Company’s financial position or results of operations or cash flows. Note 4 - Initial Public OfferingPursuantClass of Warrants Number Outstanding Public warrants 9,137,627 Private placement warrants 3,778,445 Unvested private placement warrants 1,619,348 14,535,420 the IPO, the Company sold 22,500,000 Units at a price of $10.00 per Unit. Each Unit consists of oneacquire Class A ordinary share and one-third of one redeemable warrant. common stock.ordinary sharecommon stock at a price of $11.50 per share, subjectshare. Pursuant to adjustment. Thethe warrant agreement, a holder may exercise its warrants only for a whole number of shares of Class A common stock. This means only a whole warrant may be exercised at a given time by a warrant holder. No fractional warrants will become exercisable on the later of 30 days after the completionbe issued upon separation of the initial Business Combination or 12 months from the closing of the IPO,units and only whole warrants will trade. The warrants will expire five years after the completion of the initial Business CombinationClosing Date or earlier upon redemption or liquidation.On March 10, 2021,underwriters partially exercisedwarrants become exercisable, Bowlero may call the over-allotment option to purchase 2,983,700 unitsFollowing the closing of the IPO on March 5, 2021•in whole and the underwriters’ partial exercise of over-allotment option on March 10, 2021, $254,837,000 ($10.00 per Unit) from the net proceeds of the sale of the Unitsnot in the IPO and the sale of the Private Placement Warrants was placed in a Trust Account, which can only be invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations. $1,000 was overfunded by the Sponsor and the Company intends to return it back to the Sponsor immediately.Public WarrantsEach whole warrant entitles the holder to purchase one Class A ordinary share •at a price of $11.50$0.01 per warrant;subject(as adjusted for stock sub-divisions, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending three business days before Bowlero sends the notice of redemption to adjustment as discussed herein. In addition, if (x) the Company issues additionalwarrant holders.ordinarycommon stock:or equity-linked securities for capital raising purposes in connection withdetermined based on the closingredemption date and the “fair market value” (as defined below) of the initial Business Combination at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective issue price to be determined in good faith bycommon stock;board of directors and, in the case of any such issuance to the initial shareholders or their affiliates, without taking into account any founder shares held by the initial shareholders or such affiliates, as applicable, prior to such issuance including any transfer or reissuance of such shares) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 50% of the total equity proceeds, and interest thereon, available for the funding of the initial Business Combination, and (z) the volume weighted average tradingclosing price of the Class A ordinary shares duringcommon stock equals or exceeds $10.00 per public share (as adjusted per share subdivisions, share dividends, reorganizations, recapitalizations and the 10 trading day period startinglike) on the trading day after the day on whichbefore the Company consummatessends the initial Business Combination (such price,notice of redemption to the “Market Value”)warrant holders; andbelow $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 theless than $18.00 per share redemption trigger prices described below under “Redemption of warrants(as adjusted for Class A ordinary shares when the price per Class A ordinary share equals or exceeds $10.00” and “Redemption of warrants for Class A ordinary shares when the price per Class A ordinarysplits, share equals or exceeds $18.00” will be adjusted (to the nearest cent) to be equal to 100% and 180% of the higher of the Market Valuedividends, rights issuances, subdivisions, reorganizations, recapitalizations and the Newly Issued Price, respectively.Thelike), the private placement warrants will become exercisablemust also be concurrently called for redemption on the later of one year fromsame terms as the closing of the IPO and 30 days after the completion of its initial Business Combination, and will expire five years after the completion of the Company’s initial Business Combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.The Company has agreed that as soon as practicable, but in no event later than 20 business days after the closing of the initial Business Combination, the Company will use the commercially reasonable efforts to file with the SEC a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants, and the Company will use the commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of the initial Business Combination and to maintain the effectiveness of such registration statement, and a current prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed, as specified in the warrant agreement; provided that if the Class A ordinary shares are, at the time of any exercise of a warrant, not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at the Company’s option, require holders ofoutstanding 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 so appoint, the Company will not be required to file or maintain in effect a registration statement. If a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective by the 60th day after the closing of the initial 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, but the Company will use the best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.Redemptions of warrants for cash when the price per Class A ordinary share equals or exceeds $18.00.Once the warrants become exercisable, the Company may redeem the outstanding warrants (except as described herein 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 (the “30-day redemption period”); and●if, and only if, the last reported sales price of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of the redemption to the warrant holders (the “Reference Value”).Redemption of warrants for Class A ordinary shares when the price per Class A ordinary share equals or exceeds $10.00.Once the warrants become exercisable, the Company may redeem the outstanding warrants:●in whole and not in part;●at $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 determined based on the redemption date and the “fair market value” (as defined below) of the Class A ordinary shares;●if, and only if, the closing price of the Class A ordinary shares equals or exceeds $10.00 per public share (as adjusted per share subdivisions, share dividends, reorganizations, recapitalizations and the like) on the trading day before the Company sends the notice of redemption to the warrant holders; and●if the Reference Value is less than $18.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, 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.ordinary sharescommon stock shall mean the volume-weighted average price of the Class A ordinary sharescommon stock for the 10ten trading days immediately following on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants. This redemption feature differs from the typical warrant redemption features used in other blank check offerings. The Company will provide the warrant holders with the final fair market value no later than one business day after the 10-day trading period described above ends. In no event will the warrants be exercisable in connection with this redemption feature for more than 0.361 Class A ordinary shares per warrant (subject to adjustment).Note 5 - Private PlacementSimultaneously with the closing of the IPO, the Sponsor purchased 3,666,667 at a price of $1.50 per Private Placement Warrant, and LionTree Partners LLC purchased 1,333,333 Private Placement Warrants at a price of $1.50 per Private Placement Warrant, for an aggregate purchase price of $7,500,000, in a: The 3,778,445 private placement. The proceeds from the Private Placement Warrants was added to the proceeds from the IPO held in the Trust Account.Pursuant to the underwriters’ partial exercise of the over-allotment option on March 10, 2021, the Sponsor purchased an additional 296,793 Private Placement Warrants and LionTree Partners LLC purchased an additional 101,035 Private Placement Warrants for total proceeds of $596,742 and incurred $1,641,037 of underwriting fees comprised of the payment of $596,742 upon closing and $1,044,295 of deferred underwriting fees.The Private Placement Warrantsplacement warrants (including the Class A ordinary sharescommon stock issuable upon exercise of the Private Placement Warrants) willprivate warrants) are not be transferable, assignable or saleable until 30 days after the completion of the initial Business Combination and they will not be redeemable by Bowlero for cash (other than pursuant to the Company (except as$0.10 per warrant redemption provision described below in Note 7 Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00)above) so long as they are held by Isos Acquisition Sponsor LLC (“Sponsor”), members of the Sponsor, LionTree Partners LLC (“LionTree”) or its permitted transferees. The Sponsor, or itstheir permitted transferees hasexcept as part of a redemption of all outstanding warrants that permits holders of warrants to exercise such warrants at a make-whole price. The initial purchasers of these warrants, or their permitted transferees, have the option to exercise the Private Placement Warrantswarrants on a cashless basis.Private Placement Warrantsprivate placement warrants are held by holders other than the Sponsor, LionTree or itstheir permitted transferees, the Private Placement Warrantsprivate placement warrants will be redeemable by the Company in all redemption scenariosBowlero and exercisable by the holders on the same basis as the warrants included in the Units being sold in the IPO.Note 6 - Related Party TransactionsFounder SharesIn December 2020, the Sponsor paid $25,000, or approximately $0.004 per share, to cover certain offering costs in consideration for 5,750,000 Class B ordinary shares, par value $0.0001. Up to 750,000 founder shares were subject to forfeiture by the Sponsor depending on the extent to which the underwriters’ over-allotment option was exercised. In March 2021,Share and Warrant Repurchase Plan: As of February 7, 2022, the Company effectedannounced that its Board of Directors authorized a stock dividendshare and warrant repurchase program providing for repurchases of approximately 0.125 shares for each Class B ordinary share outstanding, resulting in the initial stockholders holding an aggregate of 6,468,750 founder shares (upup to 843,750 shares of which are subject to forfeiture depending on the extent to which the underwriters’ over-allotment option is exercised). On March 8, 2021, the underwriters partially exercised the over-allotment option to purchase 2,983,700 units. As a result, 97,825 founder shares was forfeited as of September 30, 2021.The Sponsor and the Company’s founding team have entered into a letter agreement with the Company, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares and any public shares purchased during or after the IPO in connection with (i) the completion of the initial Business Combination and (ii) a shareholder vote to approve an amendment to the amended and restated memorandum and articles of association (A) that would modify the substance or timing$200,000 of the Company’s obligationoutstanding Class A common stock and warrants through February 3, 2024. Please refer to provideNote19-Share and Warrant Repurchase Programfor more details.ordinary sharescommon stock based on the right to have their shares redeemed in connection with the initial Business Combination or to redeem 100% of the Company’s public shares if the Company does not complete the initial Business Combination within the Combination Period or (B) with respect to any other provision relating to the rights of holders of the Class A ordinary shares or pre-initial Business Combination activity. Additionally, the Sponsor has agreed to waive its rights to liquidating distributions from the Trust Account with respect to its founder shares if the Company fails to complete the initial Business Combination within the Combination Period (although they will be entitled to liquidating distributions from the Trust Account with respect to any public shares they hold if the Company fails to complete the initial Business Combination within the Combination Period). If the Company submits the initial Business Combination to the public shareholders for a vote, the Sponsor and each member of the founding team have agreed to vote their founder shares and any public shares purchased during or after the IPO in favor of the initial Business Combination.Except as described herein, the Sponsor and the founding team have agreed not to transfer, assign or sell any of their founder shares until the earliest of: (1) one year after the completion of the initial Business Combination; and (2) subsequent to the initial Business Combination (x) if the closingvolume weighted average price of the Class A ordinarycommon stock for the ten trading days immediately following on the third trading day prior to the date on which notice of redemption was delivered to holders (the "Redemption Fair Market Value"). On April 27, 2022, the Company announced the Redemption Fair Market Value in connection with the upcoming redemption. The Redemption Fair Market Value is $12.0985. As a result, holders who exercise their warrants on a “cashless” basis before 5:00 p.m. New York City time on the Redemption Date will be entitled to receive 0.2936 shares of Class A common stock per warrant exercised.$12.00$15.00 per share (as adjusted for share divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 2010 trading days within any 30-tradingconsecutive 20-trading day period commencing at least 150 daysthat occurs after the initial Business CombinationClosing Date and(y)exceeds $17.50 per share for any 10 trading days within any consecutive 20-trading day period.date onEarnout Period, if Bowlero experiences an Acceleration Event, which as detailed in the BCA includes a change of control, liquidation or dissolution of the Company, completesbankruptcy or the assignment for the benefit of creditors the appointment of a liquidation, merger, share exchange, reorganizationcustodian, receiver or other similar transaction that results intrustee for all or substantially all the assets or properties of the public shareholders having the right to exchange their ordinary shares for cash, securitiesCompany, then any Earnout Shares that have not been previously issued by Bowlero (whether or other property.Due to Related PartyThe Company’s Sponsor overfundednot previously earned) to the Trust AccountBowlero stockholders or holders of $1,000Options or issued but not vested will be deemed earned and issued or vested by Bowlero as of September 30, 2021. immediately prior to the Acceleration Event, unless, in the case of an Acceleration Event, the value of the consideration to be received by the holders of Bowlero common stock in such change of control transaction is less than the applicable stock price thresholds described above. If the consideration received in such Acceleration Event is not solely cash, Bowlero’s Board of Directors will determine the treatment of the Earnout Shares.intendsuses interest rate swaps and cap agreements to return it back to the Sponsor immediately.Promissory Note - Related PartyOn December 30, 2020, the Sponsor agreed to loan the Company up to $300,000 to be used forconvert a portion of its variable interest rate exposure to fixed rates to protect the expensesCompany from future interest rate increases. The Company’s interest rate swap and cap agreements consist of the IPO. These loans were non-interest bearing, unsecuredfollowing:March 27,
2022June 27,
2021Notional Amounts Expiration Notional Amounts Expiration Interest rate swaps $ 552,500 June 30, 2022 $ 552,500 June 30, 2022 Interest rate caps 97,500 March 31, 2022 97,500 March 31, 2022 Total notional amounts $ 650,000 $ 650,000 were due at the earlier of June 30, 2021 or the closingreceives an average variable rate of the IPO. Pursuant toone-month LIBOR adjusted monthly. Under the IPO, $3,000,000interest rate cap agreements, the Company pays a fixed rate fee of cash was supposed to be held outside0.179% on the notional amount and has a strike rate of 3.00%.Trust Accountswap and available for working capital purposes.The Company received $2,502,509 and another $497,491 was due from the Sponsorcap agreements as of March 5, 2021. As27, 2022 and June 27, 2021 were liabilities of March 5, 2021,$2,141 and $8,869, respectively, and are included in other current liabilities in the Company had borrowed $125,267 under the promissory note. consolidated balance sheets.promissory notereclassifications from the Sponsor was paid in full on March 15, 2021.Working Capital LoansIn addition, in order to finance transaction costs in connection with an intended Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”accumulated other comprehensive income ("AOCI"). If the Company completes the initial Business Combination, the Company may repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. In the event that the initial Business Combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay the Working Capital Loans but no proceeds from the Trust Account would be used to repay the Working Capital Loans. Up to $1,500,000 of such Working Capital Loans may be convertible into warrants of the post-Business Combination company at a price of $1.50 per warrant at the option of the lender. Such warrants would be identical to the Private Placement Warrants. As of September 30, 2021 and December 31, 2020, the Company had no borrowings under the Working Capital Loans.Administrative Service FeeCommencing on the date the securities of the Company were first listed on The New York Stock Exchange, the Company has paid an affiliate of the Sponsor $51,667 per month for office space, secretarial and administrative services provided to members of the Company’s management team. Upon completion of the initial Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees. The Company paid $155,001 and $361,669income during the three and nine months ended September 30,March 27, 2022 and March 28, 2021 respectively.Three Months Ended Nine Months Ended March 27,
2022March 28,
2021March 27,
2022March 28,
2021Interest expense reclassified from AOCI into net loss $ 2,205 $ 2,266 $ 6,610 $ 6,798 Note 7 - (16)Fair Value Measurementsfollowing table presentsfair value and carrying value of our debt as of March 27, 2022 and June 27, 2021 are as follows:March 27,
2022June 27,
2021Carrying value $ 880,810 $ 885,387 Fair value 874,034 887,102 aboutprovided by JP Morgan Chase Bank, N.A. and is based on trading levels of lenders buying and selling their participation levels of funding (Level 2).Company’s asset andCompany held certain liabilities that were required to be measured at fair value on a recurring basis asbasis. The following tables are summaries of September 30, 2021, and indicates the fair value measurements and hierarchy of the valuation techniques the Company utilized to determine such fair value.
2021
Prices In
Active
Markets
(Level 1)
Other
Observable
Inputs
(Level 2)
Other
Unobservable
Inputs
(Level 3) Asset: Money Market Funds held in Trust Account $ 254,845,389 $ 254,845,389 $ - $ - Liabilities: FPA Liability $ 4,225,138 $ - $ - $ 4,225,138 Warrant Liability - Private Placement Warrants 7,510,700 - - 7,510,700 Warrant Liability - Public Warrants 11,722,502 11,722,502 - - $ 23,458,340 $ 11,722,502 $ - $ 11,735,838 March 27, 2022 Level 1 Level 2 Level 3 Total Public warrants $ 24,123 $ — $ — $ 24,123 Private placement warrants — — 9,975 9,975 Unvested warrants — — 3,854 3,854 Earnout shares — — 204,416 204,416 Contingent consideration — — 1,470 1,470 Derivatives — 2,141 — 2,141 Total liabilities $ 24,123 $ 2,141 $ 219,715 $ 245,979 Warrants are accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities on the Condensed Balance Sheet. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrants in the Condensed Statements of Operations.Initial MeasurementThe Company established the initial fair value of the Public Warrantswarrant liability is classified as Level 1 and Private Placement WarrantsLevel 3, depending on March 5, 2021, the dateclass of the Company’s IPOwarrant. The fair values of private warrants, unvested warrants, and on March 10, 2021 for the additional purchase of Private Placement Warrants. The initial fair value of the Public Warrants and Private Placement Warrantsearn-out shares were established using a Monte Carlo simulation model. The Warrants were classified as LevelModel (level 3 at the initial measurement date due to the use of unobservable inputs.5, 2021 and March 10, 202127, 2022 were as follows:Input Warrant
Liability FPA
Liability Expected term (years) 6.2 1.2 Expected volatility 24.2 % 24.4 % Risk-free interest rate 1.1 % 0.1 % Stock price $ 9.56 $ 9.56 Input Warrant Liability Earnout Expected term in years 4.72 4.72 Expected volatility 28 % 55 % Risk-free interest rate 2.54 % 2.54 % Stock price $ 10.86 $ 10.86 Dividend yield — — Subsequent MeasurementThe fair value of the Public Warrants at September 30, 2021 is classified as Level 1 due to the use of an observable market quote in an active market. As of September 30, 2021, the aggregate value of Public Warrants was $11,722,502.The fair value of the Private Placement Warrants and FPA liability were established using a Monte Carlo simulation model.The key inputs into the Monte Carlo simulation as of September 30, 2021 were as follows:Input Warrant
Liability FPA
Liability Expected term (years) 5.29 0.27 Expected volatility 29.3 % Risk-free interest rate 1.03 % 0.04 % Stock price $ 9.98 $ 9.88 Warrant value $ 1.39 the changes in the estimated fair value of the Company’s Level 3 Earnout liability and Warrant Liability for the nine months ended September 30, 2021: Warrant
Liability FPA
Liability Fair value as of December 31, 2020 $ - $ - Initial fair value of warrant liability and FPA liability 18,421,695 558,090 Transfer out of Level 3 to Level 1 (8,494,567 ) - Change in fair value (2,416,428 ) 3,667,048 Fair value as of September 30, 2021 $ 7,510,700 $ 4,225,138 Note 8 - Commitments and ContingenciesJune 27,
2021Issuances Settlements Changes in fair value March 27,
2022Earnouts $ — $ 181,180 $ — $ 23,236 $ 204,416 Warrant liability — 22,426 5,222 20,748 37,952 Totals: $ — $ 203,606 $ 5,222 $ 43,984 $ 242,368 Registration and Shareholder RightsThe holdersThere were no transfers in or out of any of the founder shares, Private Placement Warrants, Class A ordinary shares underlying the Private Placement Warrants, any warrants that may be issued on conversion of Working Capital Loans (and any Class A ordinary shares issuable upon the exerciselevels of the Private Placement Warrantsvaluation hierarchy during the fiscal year ended June 27, 2021 or warrants issued upon conversionthrough the period ended March 27, 2022.Working Capital Loans),fair value hierarchy at March 27, 2022 and securities issuable pursuantJune 27, 2021.forward purchase agreement (as described below) will be entitled to registration rights pursuant tofair market value of our redeemable common stock based upon our estimated enterprise value using the income approach, which includes the use Level 3 inputs. As a registration and shareholder rights agreement signed on March 2, 2021. The holders of these securities are entitled to make up to three demands, excluding short form demands, thatresult, the Company registers such securities. Notwithstanding anything to the contrary, LionTree Partners LLC may only make a demand on one occasion and only during the five-year period beginning on March 2, 2021. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completionredeemable common stock is classified within Level 3 of the initial Business Combination; provided, however, that LionTree Partners LLC may participatefair value hierarchy. Key assumptions used in a “piggy-back” registration only duringestimating the seven-year period beginningfair value of our redeemable common stock included projected revenue growth and costs and expenses, which were based on March 2, 2021.Underwriting AgreementThe Company granted the underwriters a 45-day option from March 2, 2021 to purchase up to an additional 3,375,000 units to cover over-allotments.On March 5, 2021, the Company paid a fixed underwriting discount of $4,500,000, which was calculated as two percent (2%) of the gross proceeds of the IPO. Additionally, the underwriters will be entitled to a deferred underwriting discount of 3.5% of the gross proceeds of the IPO held in the Trust Account, or $7,875,000, upon the completion of the Company’s initial Business Combination.On March 8, 2021, the underwriters partially exercised the over-allotment option to purchase 2,983,700 units, which resulted in $1,641,037 of underwriting fees comprised of the payment of $596,742 upon closing and $1,044,295 of deferred underwriting fees.Forward Purchase AgreementIn connection with the consummation of the IPO, the Company entered into a forward purchase agreement (the “Original FPA”) with affiliates of Apollo (the “forward purchasers”) that provided for the purchase of units at $10.00 per unit in a private placement to occur concurrently with the closing of the initial Business Combination. The Original FPA provided that the forward purchasers would purchase units in a minimum amount equal to 25% of the units sold in the IPO, up to 7,500,000 units, for an aggregate purchase price of up to $75,000,000. The contingent forward purchase units and their component securities would be identical to the Units being sold in the IPO, except that the contingent forward purchase units and their component securities would be subject to transfer restrictions and certain registration rights, as described herein. The funds from the sale of contingent forward purchase units may be used as part of the consideration to the sellers in the initial Business Combination. On July 1, 2021, the Companyinternal projections, historical performance, and the forward purchasers amendedbusiness environment, as well as the selection of an appropriate discount rate based on weighted-average cost of capital and restated the Original FPA (as amendedcompany-specific risk premium. See Note 17 - Common Stock. Preferred Stock and restated, the “FPA”) pursuant to which the forward purchasers agreed to increase the number of units that would be issued and sold under the FPA to 10,000,000 units,Stockholders’ Equity, for an aggregate gross purchase price of $100,000,000.further information.FPA is accounted as eitherCompany’s significant assets or liabilities in accordance with ASC 815-40 and are presented as FPA liability on the Balance Sheet. The FPA is measured at fair value at inception and on a recurringnon-recurring basis with changes insubsequent to their initial recognition include assets held for sale. We utilize third party broker estimate of value amounts to record the assets held for sale at their fair value presented within change inless costs to sell. These inputs are classified as level 2 fair value measurements.FPA inthese items approximate the Statement of Operations.Business Combination Agreement(17)On July 1, 2021, the Company (which shall transfer by way of continuation to and domesticate as a Delaware corporation) entered into a business combination agreement (the “Business Combination Agreement”) with Bowlero Corp. (“Bowlero”). Following the Business Combination, the Company will be renamed “Bowlero” and its common stock and warrants are expected to remain listed on the New YorkCommon Stock Exchange under the new ticker symbol “BOWL” and “BOWL WS”, respectively. The Business Combination is structured as a merger of the Company and Bowlero, with Bowlero merging with and into the Company, with the Company surviving, following the Company domesticating as a Delaware corporation. Bowlero’s stockholders will receive, as consideration for the Business Combination, a mix of cash, shares of the Company’s common stock and shares of the Company’s preferred stock.Note 9 - Shareholders’ EquityPreference Shares -TheThe Company is authorized to issue 1,000,000 preference shares with a par valuethree classes of $0.0001 and with such designations, voting and other rights and preferences as maystock to be determined from time to time by the Company’s board of directors. As of September 30, 2021 and December 31, 2020, there were no preference shares issued or outstanding.Ordinary Shares -The Company is authorizedcommon stock, Class B common stock (together with Class A common stock, the “Common Stock”) and Preferred Stock. The total number of shares of capital stock which the Corporation shall have authority to issue 300,000,000 is 2,400,000,000, divided into the following:A ordinary sharesA:share. AsshareSeptember 30, 2021 and December 31, 2020, there were 0 and 0 2,746,748 shares contingent on certain stock price thresholds but excluding 109,754 shares held in treasury) as of March 27, 2022A ordinary shares issued and outstanding, excluding 25,483,700 and 0 Class A ordinary shares subject to possible redemption classified as temporary equity.Class B Ordinary Shares -The Company is authorized to issue 20,000,000 Class B ordinary shares•Authorized: 200,000,000, with a par value of $0.0001 per share.sharefor each Class B ordinary share. In December 2020, the Sponsor paid $25,000, or approximately $0.004 per share to cover certain offering costs in consideration for 5,750,000 Class B ordinary shares, par value $0.0001. Up to 750,000 founder shares were subject to forfeiture by the Sponsor depending on the extent to which the underwriters’ over-allotment option is exercised. In March 2021, the Company effected a stock dividend of approximately 0.125 shares for each Class B ordinary share outstanding, resulting in the initial stockholders holding an aggregate of 6,468,750 founder shares (up to 843,750 shares of which were subject to forfeiture depending on the extent to which the underwriters’ over-allotment option is exercised). At March 5, 2021, there were 6,468,750 Class B ordinary shares issued and outstanding. On March 8, 2021, the underwriters partially exercised the over-allotment option to purchase 2,983,700 units. As a result, 97,825 founder shares were forfeited as of September 30, 2021.Holders of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class, with each share entitlingcommon stock are entitled to ten votes per share. Any dividends paid to the holder to one vote.Theholders of Class A common stock and Class B ordinary sharescommon stock will automatically convert intobe paid on a pro rata basis. On a liquidation event, any distribution to common stockholders is made on a pro rata basis to the holders of the Class A ordinarycommon stock and Class B common stock.immediately following(“Old Bowlero Redeemable Common Stock”) to its Chairman and CEO on July 3, 2017. These shares were subject to a repurchase option in the event of the Chairman’s death or disability. The amount presented in temporary equity as of June 27, 2021 represents the estimated fair value of those shares. Old Bowlero’s obligation to repurchase these shares would terminate upon the occurrence of a Change of Control or upon the consummation of a Public Offering. The increase in the repurchase obligation was recorded via adjustments to additional paid-in capital.at a ratioon December 15, 2021, since the terms of these options were such that the numberoptions vested upon the occurrence of Class a liquidity event. The Business Combination was a liquidity event that triggered the vesting of these options. For the nine months ended March 28, 2021, we recorded compensation cost of $2,351 in selling, general and administrative expenses and $20 in cost of revenues within the condensed consolidated statements of operations.ordinary shares issuable upon conversionsummary of all founder shares will equal, instock options outstanding under the 2017 Plan at March 27, 2022, and changes during the nine months then ended is presented below. The aggregate on an as-converted basis, 20%intrinsic value, which is the amount by which the market value of the sumunderlying stock exceeded the exercise price of (i)outstanding options, is before applicable income taxes and represents the amount option holders realized (in the case of exercised options) or would realize if all in-the-money options had been exercised on the last business day of the period. The total intrinsic value of options exercised during the three and nine months ended March 27, 2022 was $69,985, and the total numberintrinsic value of ordinary shares issuedoptions repurchased during the three and outstanding upon completionnine months ended March 27, 2022 was $4,362.Number of Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at June 27, 2021 49,331,480 $ 8.60 9.13 $ — Granted — — — — Exercised - stock 10,360,078 3.25 — — Repurchased - cash 639,122 — — — Forfeited and cancelled 17,962,453 13.53 — — Outstanding at March 27, 2022 20,369,827 $ 7.14 9.74 $ 75,696 Vested as of March 27, 2022 20,369,827 7.14 9.74 75,696 Exercisable as of March 27, 2022 20,369,827 7.14 9.74 75,696 IPO, plus (ii) the sumgrant of the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued,equity awards to an individual employed by the Company in connection with or in relationSubsidiary, a director or officer of the Company or Subsidiary, a consultant or advisor to the consummationCompany or an Affiliate or to a prospective employee, director, officer, consultant or director who has accepted an offer of employment or service from the Company. Equity awards include incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, RSUs and other stock based awards granted under the 2021 Plan. Shares to be granted under the 2021 Plan shall be not more than 26,446,033 shares of common stock, subject to an annual increase on the first day of each calendar year beginning January 1, 2022. The Compensation Committee of the initial Business Combination, excludingBoard of Directors or subcommittee thereof, administers the 2021 Plan. The Compensation Committee may delegate all or any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, deemed issued, or to be issued,portion of its responsibilities and powers to any seller in the initial Business Combination any Private Placement Warrants issuedperson(s) selected by it, except for grants of Awards to the Sponsor,persons who are non-employee members of the founding teamBoard or are otherwise subject to Section 16 of the Exchange Act. Any such delegation may be revoked by the Committee at any of their affiliates upon conversion of Working Capital Loanstime. The Board may at any time and from time to time grant awards and administer the 2021 Plan with respect to such awards. In any securities issued pursuantsuch case, the Board shall have all the authority granted to the forward purchase agreement. In no event willCompensation Committee under the Class B ordinary2021 Plan. The Compensation Committee approves grants to individuals, number of options, terms, conditions, performance measures, and other provisions of the award. Stock options granted under the 2021 Plan have a maximum contractual term of ten years from the date of grant, unless trading is prohibited by the Company’s insider-trading policy or a Company-imposed blackout period, in which case the terms shall be extended automatically, and an exercise price not less than the fair value of the stock on the grant date. The manner and timing of vesting and expiration are determined by the Compensation Committee.convert intofor a share-based bonus.Expected term in years 6.68 Interest rate 1.39 % Volatility 55.6 % Dividend yield — Number of Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at December 14, 2021 — $ — $ — $ — Granted 9,415,912 13.72 10.00 — Exercised — — — — Forfeited and cancelled — — — — Repurchased or settled — — — — Outstanding at March 27, 2022 9,415,912 $ 13.72 9.75 $ 573 Vested as of March 27, 2022 665,912 13.72 9.75 573 Exercisable as of March 27, 2022 665,912 13.72 9.75 573 Number of Units Weighted Average Grant Date
Fair Value Per ShareWeighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at December 14, 2021 — $ — $ — $ — Granted 933,600 9.72 2.51 — Vested — — — — Forfeited — — — — Outstanding at March 27, 2022 933,600 $ 9.72 2.41 $ 10,139 Number of Units Weighted Average Grant Date
Fair Value Per ShareWeighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at December 14, 2021 — $ — — $ — Granted 152,370 8.16 5.00 — Vested — — — — Forfeited 10,198 8.16 — — Outstanding at March 27, 2022 142,172 $ 8.16 4.72 $ 1,544 Number of Units Weighted Average Grant Date
Fair Value Per ShareWeighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at December 14, 2021 — $ — — $ — Granted 262,200 6.64 2.79 — Vested — — — — Forfeited — — — — Outstanding at March, 27, 2022 262,200 $ 6.64 2.72 $ 2,847 Award Plan Unrecognized Compensation Cost Weighted Average Period over which its expected to be recognized Stock options 2021 Plan $ 39,812 6.73 Service based RSUs 2021 Plan 8,472 2.41 Market and service based RSUs 2021 Plan 1,697 2.72 Earnout RSUs 2021 Plan 1,095 4.72 Total unrecognized compensation cost $ 51,076 5.84 Award Plan Selling, general and administrative expenses Cost of revenues Total Performance-based options 2017 Plan $ 24,468 $ 48 $ 24,516 Time-based options 2017 Plan 916 36 952 Stock options 2021 Plan 5,966 — 5,966 Service based RSUs 2021 Plan 592 13 605 Market and service based RSUs 2021 Plan 41 3 44 Earnout RSUs 2021 Plan 65 — 65 Share-based bonus — 14,228 — 14,228 Total stock based compensation expense $ 46,276 $ 100 $ 46,376 ordinarycommon stock and warrants through February 3, 2024. Repurchases of shares and warrants are made in accordance with applicable securities laws and may be made from time to time in the open market or by negotiated transactions. The amount and timing of repurchases are based on a variety of factors, including stock price, regulatory limitations, debt agreement limitations, and other market and economic factors. The share repurchase plan does not require the Company to repurchase any specific number of shares, and the Company may terminate the repurchase plan at a rateany time. As of less than one to one.March 27, 2022, the remaining balance of the repurchase plan was $193,592. The following table below sets forth the selected share and warrant repurchase plan information (in thousands, except shares and warrants repurchased) for the periods indicated:Three and Nine Months Ended March 27, 2022 Class A common stock repurchased 109,754 Total cost of Class A common stock repurchased $ 1,026 Warrants repurchased 2,690,272 Total cost of warrants repurchased $ 5,382 Note 10 - Subsequent EventsThree Months Ended March 27, 2022 March 28, 2021 Class A Class B Total Class A Class B Total Numerator Net loss allocated to stockholders $ (13,344) $ (7,461) $ (20,805) $ (25,103) $ — $ (25,103) Denominator Weighted-average shares outstanding 104,279,718 58,311,203 162,590,921 146,848,329 — 146,848,329 Net loss per share, basic and diluted $ (0.13) $ (0.13) $ (0.13) $ (0.17) $ — $ (0.17) Nine Months Ended March 27, 2022 March 28, 2021 Class A Class B Total Class A Class B Total Numerator Net loss allocated to stockholders $ (37,867) $ (6,300) $ (44,167) $ (118,998) $ — $ (118,998) Denominator Weighted-average shares outstanding 130,944,782 21,786,603 152,731,385 146,848,329 — 146,848,329 Net loss per share, basic and diluted $ (0.29) $ (0.29) $ (0.29) $ (0.81) $ — $ (0.81) evaluated subsequent eventshas 1 reporting segment, which consists of operating a bowling entertainment business. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker ("CODM") in making decisions regarding resource allocation and transactions that occurred afterassessing performance. Management continually assesses the balance sheet date upCompany’s operating structure, and this structure could be modified further based on future circumstances and business conditions. Our CODM assesses performance based on consolidated as well as bowling center-level revenue and operating profit.date that the financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosureCompany’s bowling center locations. The Company’s bowling centers are located in the financial statements.
The Company’s long-lived assets in Mexico and Canada based on country of location, which includes property and equipment, but excludes intangible assets and goodwill, net of related depreciation and amortization are not material.References toYou should read the “Company,” “Isos Acquisition Corporation,” “our,” “us” or “we” refer to Isos Acquisition Corporation. The following discussion and analysis of the Company’sour financial condition and results of operations should be read in conjunction with the unauditedour condensed consolidated financial statements and therelated notes thereto containedappearing elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.Cautionary Note Regarding Forward-Looking StatementsThis Quarterly Report on Form 10-Q includes forward-lookingand our audited consolidated financial statements withinincluded in the meaning of Section 27A offinal prospectus filed pursuant to Rule 424(b)(2) under the Securities Act of 1933, as amended, and Section 21E of(the “Securities Act”), with the Securities and Exchange ActCommission, (the “SEC”), on February 1, 2022 (the “Prospectus”).1934, as amended (the “Exchange Act”). We haveFinancial Condition and Results of Operations” to “we," “us," “our," the “Company," and “Bowlero” are intended to mean the business and operations of Bowlero Corp. and its consolidated subsidiaries. Unless otherwise indicated, all financial information in this section is presented in thousands, except share and per share data.on our current expectations and projections about future events. These forward-lookingare reasonable, we cannot assure you that it will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to known and unknown risks, uncertainties and assumptions about usassumptions. Generally, statements that may cause our actualare not historical facts, including statements concerning possible or assumed future actions, business strategies, events or results levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by suchoperations, are forward-looking statements. In some cases, you canThe words “anticipates,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predicts,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” orbut the negativeabsence of such terms or other similar expressions. Factorsthese words does not mean that might cause or contribute to such a discrepancystatement is not forward-looking. Forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, statements about our business strategy, financial projections, anticipated growth and market opportunities.describedexpressed or implied by these forward-looking statements. Some factors that could cause our actual results to differ include:Securitiesinterruptions to our and Exchange Commissionour third-party service providers’ technological and physical infrastructures;SEC”SG&A”) filings.. Due in part to the COVID-19 pandemic, the Company’s revenue for fiscal 2021 as compared to fiscal 2020 decreased by 26.7% on a same-store basis. However, during fiscal year 2021, the Company saw positive trends for revenue growth as we re-opened our centers, as well as positive growth from acquisitions and new centers. For the three months of our third quarter of fiscal 2022 (from December 27, 2021 to March 27, 2022), as compared to the corresponding periods in fiscal 2021 (which was adversely affected by the COVID-19 pandemic) and fiscal 2019, the Company’s total revenue (inclusive of acquisitions and new centers) increased by 130% and 26%, respectively. For the three months of our third quarter of fiscal 2022 (from December 27, 2021 to March 27, 2022), as compared to the corresponding periods in fiscal 2021 (which was adversely affected by the COVID-19 pandemic) and fiscal 2019, the Company’s total revenue increased on a same-store basis by 115% and 12%, respectively.Overvieware a blank check company incorporated on December 29, 2020 as a Cayman Islands exempted companycontinue to see positive momentum for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. We have not selected any business combination partnerfuture demand and we have not, nor has anyonerecovered to better than pre-pandemic performance. This growth came despite the emergence of the COVID-19 Omicron variants, which had a significant impact on results. In particular, the corporate event business (which typically peaks in the second fiscal quarter) was significantly reduced in connection with delayed/ reversed returns to the office. This was particularly impactful in New York City area and Silicon Valley, CA area. While we generated a strong financial performance prior to the COVID-19 pandemic and during the previous three quarters, the impact of COVID-19, its variants, the governmental actions imposed in response to the virus, and the resulting consequences on our behalf, initiated any substantive discussions, directly or indirectly, with anyconsumer’s risk tolerance toward health and safety matters remains uncertain.partner. We intend to effectuate our initial(the “Business Combination”) contemplated by the business combination agreement, dated as of July 1, 2021, as amended on November 1, 2021 (the "BCA"), by and among Isos Acquisition Corporation (“Isos”) and Bowlero Corp. (“Old Bowlero”). Pursuant to the BCA, Old Bowlero was merged with and into Isos, with Isos surviving the merger, and Isos was renamed “Bowlero Corp.”
(in thousands) June 28,
2020September 27,
2020December 27,
2020March 28,
2021June 27,
2021September 26,
2021December 26,
2021March 27,
2022Revenues $ 11,126 49,931 73,988 112,212 159,103 180,978 205,190 257,820 Net income (loss) (84,748) (40,772) (49,137) (23,091) (13,461) 15,564 (34,454) (17,987) 
(in thousands) June 28,
2020September 27,
2020December 27,
2020March 28,
2021June 27,
2021September 26,
2021December 26,
2021March 27,
2022Consolidated Revenues $ 11,126 49,931 73,988 112,212 159,103 180,978 205,190 257,820 Net income (loss) $ (84,748) (40,772) (49,137) (23,091) (13,461) 15,564 (34,454) (17,987) Adjustments: Interest expense 20,623 21,173 22,253 22,303 23,128 22,928 23,880 22,293 Income tax expense (benefit) 7,594 124 106 103 (1,368) (6,244) 362 (207) Depreciation and amortization 23,432 22,451 22,538 22,990 23,872 22,841 25,660 29,986 Share-based compensation 855 849 696 826 793 801 42,555 3,020 Closed center EBITDA (1) 970 579 904 806 1,750 420 398 611 Foreign currency exchange loss (gain) (57) 2 (195) 104 (99) 35 86 (90) Asset disposition loss (gain) 690 1 (142) 64 31 (30) (123) (1,601) Transactional and other advisory costs (2) 1,480 1,510 731 1,852 6,644 2,829 29,149 4,757 Charges attributed to new initiatives (3) 116 132 116 136 147 141 65 43 Extraordinary unusual non-recurring (gains) losses (4) (451) 1,164 (1,647) 1,294 859 (441) 1,662 929 Changes in the value of earnouts and warrants (5) — — — — — — (22,472) 66,617 Adjusted EBITDA $ (29,496) 7,213 (3,777) 27,387 42,296 58,844 66,768 108,371 Trailing twelve month Net loss $ (197,748) (126,461) (70,125) (55,442) (50,338) Trailing twelve month Adjusted EBITDA $ 1,327 73,119 124,750 195,295 276,279 Trailing twelve month Revenues $ 247,257 395,234 526,281 657,483 803,091 Trailing twelve month Net loss as a % of Trailing twelve month Revenues (80) % (32) % (13) % (8) % (6) % Trailing twelve month Adjusted EBITDA as a % of Trailing twelve month Revenues 1 % 19 % 24 % 30 % 34 % Three Months Ended (in thousands) March 27,
2022March 28,
2021Change Revenues $ 257,820 100 % $ 112,212 100 % $ 145,608 Costs of revenues 156,491 61 % 94,113 84 % 62,378 Gross profit 101,329 39 % 18,099 16 % 83,230 Operating (income) expenses: Selling, general and administrative expenses 30,315 12 % 17,695 16 % 12,620 (Gain) loss on sale or disposal of assets (1,601) -1 % 64 0 % (1,665) Income from joint venture (127) 0 % (69) 0 % (58) Management fee income (307) 0 % (25) 0 % (282) Other operating expense 2,333 1 % 1,119 1 % 1,214 Total operating expense, net 30,613 12 % 18,784 17 % 11,829 Operating profit (loss) 70,716 27 % (685) -1 % 71,401 Other expenses: Interest expense, net 22,293 9 % 22,303 20 % (10) Change in fair value of earnout shares 45,778 18 % — 0 % 45,778 Change in fair value of warrant liability 20,678 8 % — 0 % 20,678 Other expense 161 0 % — 0 % 161 Total other expense, net 88,910 34 % 22,303 20 % 66,607 Loss before income tax (benefit) expense (18,194) -7 % (22,988) -20 % 4,794 Income tax (benefit) expense (207) 0 % 103 0 % (310) Net loss $ (17,987) -7 % $ (23,091) -21 % $ 5,104 Three Months Ended (in thousands) March 27,
2022March 28,
2021Change % Change Center revenues on a same-store basis $ 232,695 $ 108,346 $ 124,349 115 % Revenues for media, new and closed centers 25,125 3,866 21,259 550 % Total revenues $ 257,820 $ 112,212 $ 145,608 130 % Nine Months Ended (in thousands) March 27,
2022March 28,
2021Change Revenues $ 643,988 100 % $ 236,131 100 % $ 407,857 Costs of revenues 424,742 66 % 253,654 107 % 171,088 Gross profit (loss) 219,246 34 % (17,523) -7 % 236,769 Operating (income) expenses: Selling, general and administrative expenses 145,013 23 % 49,217 21 % 95,796 Gain on sale or disposal of assets (1,755) 0 % (77) 0 % (1,678) Income from joint venture (285) 0 % (126) 0 % (159) Management fee income (564) 0 % (132) 0 % (432) Other operating expense 6,557 1 % 721 0 % 5,836 Business interruption insurance recoveries — 0 % (20,188) -9 % 20,188 Total operating expense, net 148,966 23 % 29,415 12 % 119,551 Operating profit (loss) 70,280 11 % (46,938) -20 % 117,218 Other expenses: Interest expense, net 69,101 11 % 65,729 28 % 3,372 Change in fair value of earnout shares 23,236 4 % — 0 % 23,236 Change in fair value of warrant liability 20,748 3 % — 0 % 20,748 Other expense 161 0 % — 0 % 161 Total other expense, net 113,246 18 % 65,729 28 % 47,517 Loss before income tax (benefit) expense (42,966) -7 % (112,667) -48 % 69,701 Income tax (benefit) expense (6,089) -1 % 333 0 % (6,422) Net loss $ (36,877) -6 % $ (113,000) -48 % $ 76,123 Nine Months Ended (in thousands) March 27,
2022March 28,
2021Change % Change Center revenues on a same-store basis $ 592,116 $ 224,917 $ 367,199 163 % Revenues for media, new and closed centers 51,872 11,244 40,628 361 % Total revenues $ 643,988 $ 236,161 $ 407,827 173 % Nine Months Ended (in thousands) March 27,
2022March 28,
2021$
Change%
ChangeNet cash provided by operating activities $ 142,861 $ 17,123 $ 125,738 734 % Net cash used in investing activities (178,744) (28,188) (150,556) 534 % Net cash provided by financing activities 21,752 36,858 (15,106) -41 % Effect of exchange rates on cash 15 71 (56) -79 % Net (decrease) increase in cash and equivalents $ (14,116) $ 25,864 $ (39,980) -155 % proceedsrebound in consumer demand and revenues from recently acquired centers and opening of this offeringnewly built centers.the sale of the private placement warrants, our shares, debt or a combination of cash, equitycapital expenditures, as well as center conversions and debt.The issuance of additional shares in a business combination:●may significantly dilute the equity interest of investors in this offering, which dilution would increase if the anti-dilution provisions in the Class B ordinary shares resulted in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares;●may subordinate the rights of holders of Class A ordinary shares if preference shares are issued with rights senior to those afforded our Class A ordinary shares;●could cause a change in control if a substantial number of our Class A ordinary shares are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;●may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us;●may adversely affect prevailing market prices for our units, Class A ordinary shares and/or warrants; and●may not result in adjustment to the exercise price of our warrants.Similarly, if we issue debt or otherwise incur significant debt, it could result in:●default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;●acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;●our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;●our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding;●our inability to pay dividends on our Class A ordinary shares;●using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our Class A ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;●limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;●increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and●limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.incur significant costscontinue to invest in accretive acquisitions in future periods as well as center upgrades and conversions.pursuitnine months ended March 27, 2022 reflecting the net funds received from the Business Combination, partially offset by scheduled long-term debt payments. In the comparable period in the prior fiscal year, we obtained additional funds under our Incremental Liquidity Facility, which was entered into on September 25, 2020, as part of our initial business combination. We cannot assure you that our plansthe Company’s response to raise capital orthe COVID-19 pandemic to complete our initial business combination will be successful.increase liquidity.Proposed Business Combinationmore fully describedof March 27, 2022, the Company’s contractual obligations, including payments due by period, are not materially different than disclosed in Note 1Bowlero Corp’s audited annual consolidated financial statements included in the Company’s Prospectus previously filed with the SEC, except for warrants and earnouts liabilities disclosed in Notes 13 and 14, respectively, to the unaudited condensed financial statements included in this Quarterly Report on Form 10-Q.Item 1defined by the First Lien Credit Agreement, which we refer to in this Quarterly Report on Form 10-Q as Covenant Adjusted EBITDA. More specifically, Covenant Adjusted EBITDA is used to calculate the First Lien Leverage Ratio, Excess Cash Flow and the Total Leverage Ratio (each as defined in the First Lien Credit Agreement). Failure to meet a 6 to 1 First Lien Leverage Ratio when our revolving credit facility, along with certain letters of credit, is at least 35% drawn, is a default under the First Lien Credit Agreement. In addition, we are required to prepay borrowings under the First Lien Credit Agreement under certain circumstances based on JulyExcess Cash Flow and the First Lien Leverage Ratio. More specifically, we are required to prepay an amount equal to 50% of our Excess Cash Flow if the First Lien Leverage Ratio is 4 to 1, 2021,25% if it is 3.5 to 1 and none if it is less than or equal to 3.5 to 1.a business combination agreement (as amended, the “Business Combination Agreement”) with Bowlero Corp. (“Bowlero”). Pursuantan amendment to the Business CombinationFirst Lien Credit Agreement that, among other things, provided us with a covenant waiver period through June 26, 2021 that waived application of the First Lien Leverage Ratio test for so long as Bowlero satisfied a minimum liquidity test of maintaining Total Liquidity (as defined in the First Lien Credit Agreement) of not less than $20,000, calculated on each business day and certified monthly. Under the covenant waiver, if Bowlero failed to satisfy the Total Liquidity test, it would avoid a default under the covenant waiver as long as, on any business day on which it failed the Total Liquidity test, our Core Liquidity (as defined in the First Lien Credit Agreement) was not less than $20,000. We have been and continue to be in compliance with both the Total Liquidity test and the alternative Core Liquidity test.Company domesticatingtable below for additional detail on the calculation of Adjusted EBITDA and Covenant Adjusted EBITDA. Covenant Adjusted EBITDA presented below is calculated and disclosed exactly as “Consolidated Adjusted EBITDA” is defined in the First Lien Credit Agreement.(in thousands) June 27,
2021September 26,
2021December 26,
2021March 27,
2022Consolidated Net loss $ (126,461) (70,125) (55,442) (50,338) Adjustments: Interest expense 88,857 90,612 92,239 92,229 Income tax expense (benefit) (1,035) (7,403) (7,147) (7,457) Depreciation and amortization 91,851 92,241 95,363 102,359 Share-based compensation 3,164 3,116 44,975 47,169 Closed center EBITDA (1) 4,039 3,880 3,374 3,179 Foreign currency exchange (gain) loss (188) (155) 126 (68) Asset disposition loss (gain) (46) (77) (58) (1,723) Transactional and other advisory costs (2) 10,737 12,056 40,474 43,379 Charges attributed to new initiatives (3) 531 540 489 396 Extraordinary unusual non-recurring losses (4) 1,670 65 3,374 3,009 Changes in the value of earnouts and warrants (5) — — (22,472) 44,145 Adjusted EBITDA $ 73,119 124,750 195,295 276,279 Business interruption insurance recoveries (20,188) — — — Annual covenant adjustments: Contra rent expense (6) (5,305) (4,779) (12,537) (20,630) Non-income other taxes (7) 20,911 21,078 21,657 22,564 Optimization run-rate savings (8) 22,682 16,717 10,396 4,219 De novo adjustment (9) 7,022 17,603 24,388 14,451 Renovated facility adjustment (10) 6,617 6,046 2,931 2,253 Total covenant adjustments 31,739 56,665 46,835 22,857 Trailing twelve month Adjusted EBITDA 73,119 124,750 195,295 276,279 Trailing twelve month Covenant Adjusted EBITDA $ 104,858 181,415 242,130 299,136 Delaware corporation, Bowlero will mergevariety of reasons, including permanent closure, newly acquired or built centers prior to opening, centers closed for renovation or rebranding and conversion. Closed centers do not include centers closed in compliance with local, state and intofederal government restrictions due to COVID-19. If a center is not open on the Company, with the Company surviving. Bowlero’s stockholders will receive, as consideration for the Business Combination, a mix of cash, shareslast day of the Company’s common stockreporting period, it will be considered closed for that reporting period.shares of the Company’s preferred stock.For additional information regarding the Business Combination Agreementother advisory costs is to remove charges incurred in connection with any transaction, including mergers, acquisitions, refinancing, amendment or modification to indebtedness, dispositions and Bowlero, see the Form 8-K filed by the Company with the SEC on July 1, 2021 and the Form S-4 initially filed by the Company with the SEC on July 22, 2021, as it may be amended.Results of OperationsAs of September 30, 2021, we have not commenced any operations. All activity for the period from December 29, 2020 (inception) through September 30, 2021 relates to our formation and initial public offering. We will not generate any operating revenues until after the completion of our initial business combination, at the earliest. We will generate non-operating income in the form of interest income from the proceeds derived from the initial public offering and placed in the trust account.For the three months ended September 30, 2021, we had a net loss of $8,257,112 which was comprised of operating costs of $785,494, trust interest income of $3,848, unrealized loss on change in fair value of warrants of $5,266,872, and unrealized loss on change in fair value of FPA of $2,208,594.For the nine months ended September 30, 2021, we had a net loss of $6,370,860 which was comprised of operating costs of $1,260,847, trust interest income of $7,389, warrant issuance costs of $638,847, unrealized loss on change in fair value of warrants of $811,507, and unrealized loss on change in fair value of FPA of $3,667,048.Liquidity and Capital ResourcesAs of September 30, 2021, we had approximately $1.2 million in our operating bank account, and working capital of approximately $1.2 million.Prior to the completion of the Initial Public Offering, our liquidity needs had been satisfied through a capital contribution from the Sponsor of $25,000, to cover certain offering costs, for the purchase of founder shares, and a loan under an unsecured promissory note from the Sponsor of $125,267. The promissory note from the Sponsor was paid in full on March 15, 2021. Subsequent to the consummation of the Initial Public Offering and Private Placement, our liquidity needs have been satisfied through the proceeds from the consummation of the Private Placement not held in the Trust Account.In addition, in order to finance transaction costs in connection with a Business Combination, our Sponsor or an affiliateinitial public offering, in each case, regardless of the Sponsor, or certain of our officers and directors may, but are not obligated to, provide us Working Capital Loans. To date, there were no amounts outstanding under any Working Capital Loans.Based on the foregoing, management believes that we will have sufficient working capital and borrowing capacity to meet our needs through the earlier of the consummation of a Business Combination or one year fromwhether consummated. The large increases in this filing. Over this time period, we will be using these funds for paying existing accounts payable, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination.Critical Accounting Policies and EstimatesThe preparation of the unaudited condensed 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 unaudited condensed financial statements and the reported amounts of expensesadjustment during the reporting period. Actual results could differ from those estimates. We have identifiedquarters ended December 26, 2021 and March 27, 2022 reflect the following as our critical accounting policies:Ordinary Shares Subject to Possible RedemptionAll of the 25,483,700 Class A ordinary shares 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 or if there is a shareholder vote or tender offer in connectiontransactional costs associated with the Business Combination and in connectionCombination.certain amendmentsthe undertaking and/or implementation of new initiatives, business optimization activities, cost savings initiatives, cost rationalization programs, operating expense reductions and/or synergies and/or similar initiatives and/orCompany’s amendedclosure or consolidation of any office or facility, any systems implementation charge, any severance charge, any one time compensation charge, any charge relating to entry into a new market, any charge relating to any strategic initiative or contract and restated memorandumany lease run-off charge.articleslosses, which include any gain or charge from any extraordinary item as determined in good faith by the Company and/or any non-recurring or unusual item as determined in good faith by the Company and/or any charge associated with and/or payment of association. In accordance withany legal settlement, fine, judgment or order.SEC’s staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within the controlvalue of earnouts and warrants is to remove of the Company require ordinary shares subject to redemption to be classified outsideimpact of permanent equity. Therefore, all Class A ordinary shares have been classified outsidethe revaluation of permanent equity.The Company recognizes changes in redemption value immediately as they occurthe earnouts and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are effected by charges against additional paid in capital to the extent available and accumulated deficit.Net Loss Per Ordinary ShareThe Company has two classes of shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Earnings and losses are shared pro rata between the two classes of shares. The 13,892,395 ordinary shares issuable upon exercise of outstanding warrants to purchase the Company’s shares were excluded from diluted earnings per share for the three and nine months ended September 30, 2021 because the warrants are contingently exercisable, and the contingencies have not yet been met.warrants. As a result diluted net loss per ordinary share is the same as basic net loss per ordinary share for the periods.Derivative Financial InstrumentsThe Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific termsBusiness Combination, the Company recorded liabilities for earnouts and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter.warrants. Changes in the estimated fair value of the warrantsearnout and warrant liabilities are recognized asin the statement of operations. Decreases in the liability will have a non-cash gain or lossfavorable impact on the statementsstatement of operations.operations and increases in the liability will have an unfavorable impact.initial fair valueContra rent is calculated to adjust for such non-cash items as straight-lined rent and other non-cash operating and capital lease items. The adjustments in Contra rent to derive cash rent can be positive or negative adjustments, and as for example, rent expense is increased by including cash payments to landlords in cash rent that would otherwise go to amortization and interest expense.Privatebusiness. The total of de novo and Public Warrants was estimated using a Monte Carlo simulation (see Note 7).renovated facility adjustments shall not, for any period, exceed an amount equal to 15% of Covenant Adjusted EBITDA for such period, calculated prior to giving effect to such add-backs.September 30, 2021,March 27, 2022, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.JOBS ActJOBS Act contains provisionsCompany performs its annual impairment testing on the first day of our fiscal fourth quarter of each year and when circumstances change that amongwould more likely than not reduce the fair value of a reporting unit below its carrying value.things, relax certainevents, such as changes in the Company’s management, strategy and customer base. If the Company determines that it is more likely than not that the fair value of a reporting requirements for qualifying public companies. We will qualify as an “emerging growth company” and underunit is less than its carrying value, the JOBS ActCompany performs a quantitative goodwill impairment analysis by comparing the carrying amount to the fair value of the reporting unit. If the carrying amount exceeds the fair value, goodwill will be allowedwritten down to the fair value and recorded as impairment expense in the consolidated statements of operations. For fiscal 2021, the Company performed a quantitative assessment of goodwill using the income approach due to the economic impact of the COVID-19 pandemic with the temporary closure of our centers. The Company considers the COVID-19 situation to be temporary and the Company’s overall business is expected to continue to recover. The fair value of our one reporting unit is substantially in excess of carrying value and not considered at risk of goodwill impairment. There was no impairment charge for goodwill recorded in fiscal 2022 or fiscal 2021. pronouncements based onstandards until private companies (that is, those that have not had a registration statement under the Securities Act declared effective date for private (not publicly traded) companies. Weor do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the Exchange Act) are electingrequired to delaycomply with the adoption of new or revised financial accounting standards,standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and as a result, we may not comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have 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, we, as an emerging growth company, can adopt the new or revised accounting standards onstandard at the relevant dates on which adoptiontime private companies adopt the new or revised standard. This may make comparison of such standards is required for non-emerging growth companies. As a result, our financial statements may notwith those of another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.comparable to companiesa large accelerated filer, which means the market value of our common equity that comply with new or revised accounting pronouncementsis held by non-affiliates exceeds $700,000 as of public company effective dates.Additionally,the end of the prior fiscal year’s second fiscal quarter; and (2) the date on which we arehave issued more than $1,000,000 in non-convertible debt securities during the process of evaluatingprior three-year period. References herein to “emerging growth company” have the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forthmeaning associated with it in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our initial public offering or until we are no longer an “emerging growth company,” whichever is earlier.Aboutabout Market RiskNot required for smaller reporting companies.Securitiesthe Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in ourCompany reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.Evaluation of Disclosure Controls and ProceduresOfficersOfficer 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 27, 2022. Based upon their evaluation, our Chief Executive OfficersOfficer 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 September 30, 2021,March 27, 2022 due to the existence of material weaknesses in internal control over financial reporting that were identified in connection with the audits of our consolidated financial statements as of June 27, 2021 and for the year ended June 27, 2021, and which are still being remediated.analyzing complexinternal control over financial instruments includingreporting, such that there is a reasonable possibility that a material misstatement of the proper classification of warrants as liabilities and redeemable Class A ordinary shares as temporary equity. In light of this material weakness, we performed additional analysis as deemed necessary to ensure that our unauditedannual or interim financial statements were preparedwill not be prevented or detected on a timely basis.accordance with U.S. generally accepted accounting principles. Accordingly, management believes thatcontrol transaction in fiscal 2018 which did not identify errors in goodwill and additional paid in capital disclosed in the consolidated financial statements included in this Quarterly Report onour Form 10-Q present fairlyS-1/A and (ii) insufficient technical accounting expertise to assess complex and/or unusual transactions which did not identify errors related to accounting for master lease modifications, certain lease transactions, the income tax provision and stock options valuations disclosed in all material respects our financial position, results of operations and cash flows for the periods presented.Regarding the restatements to the March 31, 2021, and June 30, 2021 quarterlyconsolidated financial statements included in the Company'sour Form 10-Qs,S-1/A.filedsoon as possible and expect to fully remediate during our fiscal year ending July 2, 2023 through, among other steps, hiring additional qualified accounting and finance personnel, engagement of accounting and financial reporting consultants with the SEC on June 1, 2021technical expertise over complex and/or unusual transactions, implementation of internal controls over financial reporting, formalization of accounting policies and August 17, 2021, respectively, as well as the Company's balance sheet included on the Company's Form 8-K, as filed with the SEC on March 12, 2021,controls and restated on the Form 10-Q filed with the SEC on July 19, 2021,we also plan to implement certain redemption provisions not solely within the control of the Company require ordinary shares subjectaccounting systems to redemption to be classified outside of permanent equity. The Company had previously classified a portion of the Class A ordinary shares in permanent equity. The Company restated its financial statements to classify all Class A ordinary shares as temporary equity and any related impact, as the threshold in its charter would not change the nature of the underlying shares as redeemable and thus would be required to be disclosed outside of permanent equity.automate manual processes.It is noted that the non-cash adjustments to the financial statements do not impact the amounts previously reported for our cash and cash equivalents or total assets. In light of this material weakness, 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.overOver Financial ReportingOther thenExcept as noteddisclosed above, there waswere no changechanges in our internal control over financial reporting that occurred during the fiscal quarter of 2021 covered by this Quarterly Report on Form 10-Qnine months ended March 27, 2022 that hashave materially affected, or isare reasonably likely to materially affect, our internal control over financial reporting.lightdesigning and evaluating the disclosure controls and procedures and internal control over financial reporting, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the material weakness, we have enhanced our processesdesired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to identifyapply judgment in evaluating the benefits of possible controls and appropriately apply applicable accounting requirementsprocedures relative to better evaluate and understand the nuances of the complex accounting standards that apply to our financial statements. Our plans at this time 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.Proceedings.ProceedingsNone.Factors.FactorsAsWe have disclosed under the heading “Risk Factors” in our Prospectus filed with the SEC on February 1, 2022 the risk factors that materially affect our business, financial condition or results of the date of this report, except as set forth in the Form S-4 filed on July 22, 2021, as amended, thereoperations. There have been no material changes from the risk factors previously disclosed in our final prospectus dated March 2, 2021 and filed withdisclosed. You should carefully consider the SEC on March 4, 2021, andrisk factors set forth in the Prospectus and the other information set forth elsewhere in this Quarterly Report on Form 10-Q/A for the Quarterly Period ended March 31, 2021, dated July 16, 202110-Q. You should be aware that these risk factors and filed with the SEC on July 19, 2021,other information may not described every risk that we face. Additional risks and in the Form 10-Q for the Quarterly Period ended June 30, 2021, dated August 16, 2021 and filed with the SEC on August 17, 2021.Proceeds.None.Item 3. Defaults Upon Senior Securities.None.Item 4. Mine Safety Disclosures.Not Applicable.Item 5. Other Information.None.
Isos’ sponsor is an accredited investor for purposes of Rule 501 of Regulation D. Each of the equity holders in the sponsor is an accredited investor under Rule 501 of Regulation D. The sole business of Isos Acquisition Sponsor LLC is to act as Isos’ sponsor in connection with its IPO.Fiscal Period Total Number of Shares Purchased Average Price Paid per Share1 Total Number of Warrants Purchased Average Price Paid per Warrant Total Number of Shares and warrants Purchased as Part of Publicly Announced plans or Programs2 Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan or Programs3 December 27, 2021 - January 30, 2022 — $ — — $ — — $ 200,000 January 31, 2022 - February 27, 2022 72,732 9.01 2,681,922 2.00 2,754,654 193,981 February 28, 2022 - March 27, 2022 37,022 10.01 8,350 2.15 45,372 193,592 Total 109,754 $ 9.35 2,690,272 $ 2.00 2,800,026 The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.* Filed herewith. **#Furnished.Portions of this exhibit have been omitted pursuant to Item 601(a)(v) of Regulation S-K.(1)Incorporated by reference to the Company’s Form 8-K, filed with the SEC on July 1, 2021.SIGNATURESIn accordance withPursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.ISOS ACQUISITION CORPORATIONBOWLERO CORP.Date: November 15, 2021By:/s/ Michelle WilsonBrett I. ParkerName: Michelle WilsonBrett I. ParkerTitle:Co-Chairman of the Board and Co-Chief Executive Officer(Principal Executive Officer)Date: November 15, 2021By:/s/ Winston MeadeName:Winston MeadeTitle:Chief Financial Officer (Principal Accounting and Financial Officer)26Isos Acquisition Corp. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 false --12-31 Q3 0001840572 iso4217:USD xbrli:shares