Related Party Transactions	3 Months Ended
Mar. 31, 2022
Related Party Transactions
Related Party Transactions	Note 4 — Related Party Transactions Founder Shares On August 31, 2020, the Sponsor paid $25,000, or approximately $0.004 per share, to cover certain expenses on behalf of the Company in exchange for the issuance of 5,750,000 Class B ordinary shares, par value $0.0001 (the “Founder Shares”). On September 10, 2020, HS Chronos purchased 3,287,412 Founder Shares from the Sponsor for $14,293, or $0.004 per share. On January 5, 2021, the Company declared a share dividend satisfied by way of issuance of 0.2 of a share for each ordinary share issued and outstanding, resulting in the Sponsor holding an aggregate of 2,955,106 Founder Shares (up to 285,212 shares of which were subject to forfeiture depending on the extent to which the underwriters’ over-allotment option was exercised) and HS Chronos holding an aggregate of 3,944,894 Founder Shares (up to 614,788 shares of which were subject to forfeiture depending on the extent to which the underwriters’ over-allotment option was exercised). All shares and associated amounts have been adjusted to reflect this share dividend. The forfeiture would be adjusted to the extent that the over-allotment option was not exercised in full by the underwriters so that the Founder Shares will represent 20.0% of the Company’s issued and outstanding shares after the Initial Public Offering. On January 12, 2021, the underwriters fully exercised the over-allotment option; thus, these Founder Shares were no longer subject to forfeiture. The Founder Shares will automatically convert into shares of Class A ordinary shares at the time of the Company’s initial Business Combination and are subject to certain transfer restrictions, as described in Note 8. The Initial Shareholders have agreed, subject to limited exceptions, not to transfer, assign or sell any of their Founder Shares until the earlier to occur of (i) one year after the completion of the initial Business Combination or (ii) the date following the completion of the initial Business Combination on which the Company completes a liquidation, merger, share exchange or other similar transaction that results in all of the shareholders having the right to exchange their ordinary shares for cash, securities or other property. Notwithstanding the foregoing, if the closing price of the Class A ordinary shares equals or exceeds $12.00 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 commencing at least 120 days after the initial Business Combination, the Founder Shares will be released from the lockup. Private Placement Warrants Simultaneously with the closing of the Initial Public Offering, the Company consummated the Private Placement of an 7,300,000 Private Placement Warrants to the Sponsor and HS Chronos at an average purchase price of $1.00 per Private Placement Warrant, generating gross proceeds to the Company of $7,300,000. In connection with the consummation of the sale of additional Units pursuant to the underwriters’ over-allotment option on January 12, 2021, the Company sold the additional 720,000 Units to the Sponsor at $1.00 per Private Placement Warrant generating additional gross proceeds of approximately $0.7 million received by the Company on January 8, 2021. The Private Placement Warrants are identical to the Public Warrants sold as part of the Units in the Initial Public Offering, except that the Sponsor and HS Chronos have agreed not to transfer, assign or sell any of the Private Placement Warrants (except to certain permitted transferees) until 30 days after the completion of the Company’s initial Business Combination. The Private Placement Warrants are also not redeemable by the Company so long as they are held by the Sponsor and HS Chronos or their respective permitted transferees. Certain proceeds from the Private Placement Warrants were added to the proceeds from the Initial Public Offering to be held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the Private Placement Warrants will expire worthless. The Private Placement Warrants will be non-redeemable and exercisable on a cashless basis so long as they are held by the Sponsor or its permitted transferees. Related Party Loans On August 28, 2020, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover for expenses related to the Initial Public Offering pursuant to a promissory note (the “Note”). This loan was non-interest bearing and was payable upon the earlier of June 30, 2021 or the completion of the Initial Public Offering. The Company borrowed $280,000 under the Note through December 31, 2020 and repaid the Note in full on January 8, 2021. This facility is no longer available to be drawn. In order to finance the Company’s working capital needs and transaction costs in connection with an initial Business Combination, on November 16, 2021, one of the Company’s Initial Shareholders agreed to loan the Company up to $1,500,000 (“Working Capital Loans”) pursuant to a line of credit (“Working Capital Line of Credit”). The Company intends to use its borrowings for paying 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. Working Capital Loans accrue interest at eleven percent (11%) per annum and are due on the earlier of January 8, 2023 or the completion of an initial Business Combination. The lender may decline requests for Working Capital Loans that fund items not contemplated by or in excess of the Company’s operating budget. If the Company completes an initial Business Combination, the Company must repay the outstanding balance of the principal and interest owing under the Working Capital Line of Credit either, at the lender’s election, (i) in cash out of the proceeds of the Trust Account released to the Company or (ii) by converting up to $1,500,000 of the outstanding balance of the principal, in whole or in part, into the Company’s warrants at a price of $1.00 per warrant and paying the outstanding balance of the interest in cash. In the event that an initial Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans and interest arising therefrom. The Working Capital Line of Credit and funds available to the Company outside of the Trust Account may not be sufficient to allow the Company to operate until January 8, 2023 (24 months following the closing of its Initial Public Offering), assuming that its initial Business Combination is not completed during that time. The Company expects to incur significant costs in pursuit of an initial Business Combination. However, the Company’s affiliates are not obligated to make further loans to the Company in the future, and the Company may not be able to raise additional financing from unaffiliated parties necessary to fund its expenses. Any such event in the future may negatively impact the analysis regarding the Company’s ability to continue as a going concern at such time. As of March 31, 2022 and December 31, 2021, there was $655,000 and $188,000, respectively, of outstanding borrowings under the Working Capital Loan Line of Credit, presented at fair value of approximately $603,000 and $179,000, respectively, with approximately $845,000 and $1.3 million, respectively, available to be drawn. As of March 31, 2022 and December 31, 2021, there were no other amounts outstanding under Working Capital Loans. Administrative Support Agreement Commencing on the effective date of the Company’s Initial Public Offering, the Company agreed to pay its Sponsor a total of up to $20,000 per month, for up to 24 months, for office space, utilities, secretarial and administrative support, of which Mr. de St. Paer, the Company’s Chief Financial Officer, will be paid $10,000 per month. Upon completion of the initial Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees. For the three months ended March 31, 2022 and 2021, the Company incurred approximately $60,000 in each period, for expenses in connection with the Administrative Support Agreement, included as administrative expenses – related party on the accompanying condensed statements of operations. As of March 31, 2022 and December 31, 2021 and 2020, there were -0- and $20,000 payable for such expenses.

Related Party Transactions

3 Months Ended

Mar. 31, 2022

Note 4 — Related Party Transactions

Founder Shares

On August 31, 2020, the Sponsor paid $25,000, or approximately $0.004 per share, to cover certain expenses on behalf of the Company in exchange for the issuance of 5,750,000 Class B ordinary shares, par value $0.0001 (the “Founder Shares”). On September 10, 2020, HS Chronos purchased 3,287,412 Founder Shares from the Sponsor for $14,293, or $0.004 per share. On January 5, 2021, the Company declared a share dividend satisfied by way of issuance of 0.2 of a share for each ordinary share issued and outstanding, resulting in the Sponsor holding an aggregate of 2,955,106 Founder Shares (up to 285,212 shares of which were subject to forfeiture depending on the extent to which the underwriters’ over-allotment option was exercised) and HS Chronos holding an aggregate of 3,944,894 Founder Shares (up to 614,788 shares of which were subject to forfeiture depending on the extent to which the underwriters’ over-allotment option was exercised). All shares and associated amounts have been adjusted to reflect this share dividend. The forfeiture would be adjusted to the extent that the over-allotment option was not exercised in full by the underwriters so that the Founder Shares will represent

20.0% of the Company’s issued and outstanding shares after the Initial Public Offering. On January 12, 2021, the underwriters fully exercised the over-allotment option; thus, these Founder Shares were no longer subject to forfeiture.

The Founder Shares will automatically convert into shares of Class A ordinary shares at the time of the Company’s initial Business Combination and are subject to certain transfer restrictions, as described in Note 8.

The Initial Shareholders have agreed, subject to limited exceptions, not to transfer, assign or sell any of their Founder Shares until the earlier to occur of (i) one year after the completion of the initial Business Combination or (ii) the date following the completion of the initial Business Combination on which the Company completes a liquidation, merger, share exchange or other similar transaction that results in all of the shareholders having the right to exchange their ordinary shares for cash, securities or other property. Notwithstanding the foregoing, if the closing price of the Class A ordinary shares equals or exceeds $12.00 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 commencing at least 120 days after the initial Business Combination, the Founder Shares will be released from the lockup.

Private Placement Warrants

Simultaneously with the closing of the Initial Public Offering, the Company consummated the Private Placement of an 7,300,000 Private Placement Warrants to the Sponsor and HS Chronos at an average purchase price of $1.00 per Private Placement Warrant, generating gross proceeds to the Company of $7,300,000. In connection with the consummation of the sale of additional Units pursuant to the underwriters’ over-allotment option on January 12, 2021, the Company sold the additional 720,000 Units to the Sponsor at $1.00 per Private Placement Warrant generating additional gross proceeds of approximately $0.7 million received by the Company on January 8, 2021.

The Private Placement Warrants are identical to the Public Warrants sold as part of the Units in the Initial Public Offering, except that the Sponsor and HS Chronos have agreed not to transfer, assign or sell any of the Private Placement Warrants (except to certain permitted transferees) until 30 days after the completion of the Company’s initial Business Combination. The Private Placement Warrants are also not redeemable by the Company so long as they are held by the Sponsor and HS Chronos or their respective permitted transferees.

Certain proceeds from the Private Placement Warrants were added to the proceeds from the Initial Public Offering to be held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the Private Placement Warrants will expire worthless. The Private Placement Warrants will be non-redeemable and exercisable on a cashless basis so long as they are held by the Sponsor or its permitted transferees.

Related Party Loans

On August 28, 2020, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover for expenses related to the Initial Public Offering pursuant to a promissory note (the “Note”). This loan was non-interest bearing and was payable upon the earlier of June 30, 2021 or the completion of the Initial Public Offering. The Company borrowed $280,000 under the Note through December 31, 2020 and repaid the Note in full on January 8, 2021. This facility is no longer available to be drawn.

In order to finance the Company’s working capital needs and transaction costs in connection with an initial Business Combination, on November 16, 2021, one of the Company’s Initial Shareholders agreed to loan the Company up to $1,500,000 (“Working Capital Loans”) pursuant to a line of credit (“Working Capital Line of Credit”). The Company intends to use its borrowings for paying 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. Working Capital Loans accrue interest at eleven percent (11%) per annum and are due on the earlier of January 8, 2023 or the completion of an initial Business Combination. The lender may decline requests for Working Capital Loans that fund items not contemplated by or in excess of the Company’s operating budget. If the Company completes an initial Business Combination, the Company must repay the outstanding balance of the principal and interest owing under the Working Capital Line of Credit either, at the lender’s election, (i) in cash out of the proceeds of the Trust Account released to the Company or (ii) by converting

up to $1,500,000 of the outstanding balance of the principal, in whole or in part, into the Company’s warrants at a price of $1.00 per warrant and paying the outstanding balance of the interest in cash. In the event that an initial Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans and interest arising therefrom. The Working Capital Line of Credit and funds available to the Company outside of the Trust Account may not be sufficient to allow the Company to operate until January 8, 2023 (24 months following the closing of its Initial Public Offering), assuming that its initial Business Combination is not completed during that time.

The Company expects to incur significant costs in pursuit of an initial Business Combination. However, the Company’s affiliates are not obligated to make further loans to the Company in the future, and the Company may not be able to raise additional financing from unaffiliated parties necessary to fund its expenses. Any such event in the future may negatively impact the analysis regarding the Company’s ability to continue as a going concern at such time. As of March 31, 2022 and December 31, 2021, there was $655,000 and $188,000, respectively, of outstanding borrowings under the Working Capital Loan Line of Credit, presented at fair value of approximately $603,000 and $179,000, respectively, with approximately $845,000 and $1.3 million, respectively, available to be drawn. As of March 31, 2022 and December 31, 2021, there were no other amounts outstanding under Working Capital Loans.

Administrative Support Agreement

Commencing on the effective date of the Company’s Initial Public Offering, the Company agreed to pay its Sponsor a total of up to $20,000 per month, for up to 24 months, for office space, utilities, secretarial and administrative support, of which Mr. de St. Paer, the Company’s Chief Financial Officer, will be paid $10,000 per month. Upon completion of the initial Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees. For the three months ended March 31, 2022 and 2021, the Company incurred approximately $60,000 in each period, for expenses in connection with the Administrative Support Agreement, included as administrative expenses – related party on the accompanying condensed statements of operations. As of March 31, 2022 and December 31, 2021 and 2020, there were -0- and $20,000 payable for such expenses.

Kairos Acquisition Corp. 10-Q