Brigade-M3 European Acquisition Corp June 2022 Final

INTERIM DIRECTORS’ REPORT

Introduction

Brigade-M3 European Acquisition Corp. (the “Company”) is a blank cheque company incorporated under

the laws of the Cayman Islands as an exempted company with limited liability formed for the purpose of

effecting a merger, share exchange, asset acquisition, share purchase, reorganisation or similar business

combination with an operating company with significant operations in Europe which has positively

benefited from a structural shift caused by the COVID-19 pandemic or has been negatively impacted by a

temporary dislocation caused by the COVID-19 pandemic, which is referred to herein as a business

combination (“Business Combination”).

The Company was formed by Brigade SPAC Sponsor II LLC (the “Sponsor Entity”). The Sponsor Entity

is controlled by Brigade Capital GP, LLC, which is an affiliate of Brigade Capital Management, LP, together

with the group entities that are affiliated with it by way of common control (“Brigade”). M3 Euro SPAC

Sponsor I, LP (“M3”) is the strategic partner to the Sponsor Entity.

The unaudited condensed interim financial statements cover the period 1 January 2022 to 30 June 2022 (the

“Reporting Period”).

Business and Financial Developments

The Company appointed: (i) Cantor-Aurel and Cantor Fitzgerald Europe (“Cantor”) as joint global

coordinators (collectively, the “Joint Global Coordinators”); (ii) Cantor-Aurel as sole bookrunner; (iii)

Brigade Capital UK LLP (the “Financial Adviser” or “Brigade UK”), an affiliate of the Sponsor Entity, as

the financial adviser; (iv) ABN AMRO Bank N.V. as the listing and paying agent, and the warrant agent; and

(v) HSBC Bank plc (the “Escrow Agent”) as escrow agent, in each case, in connection with the Offering

(as defined below) and admission to listing and trading on Euronext Amsterdam of the Units, Ordinary

Shares and Warrants (“Admission”).

On 8 December 2021, the Company offered by way of private placement 25,000,000 units (the “Units”),

each consisting of one ordinary share (an “Ordinary Share”) and one-half (1/2) of a warrant (a

“Warrant”), at a price of $10.00 per Unit (the “Offering”). The Offering ended on 10 December 2021,

raising proceeds of $250,000,000, and the Units, Ordinary Shares and Warrants were admitted to listing on

Euronext Amsterdam on 10 December 2021.

The Company has 18 months from 14 December 2021 (the “Settlement Date”) to complete a Business

Combination (the “Business Combination Deadline”).

The Company holds the proceeds of the IPO in an escrow account administered by the Escrow Agent (the

“Escrow Account”). As of 30 June 2022, the amount held in the Escrow Account was $255,162,939.

More information about the Company, including the Company's Initial Public Offering (“IPO”) Prospectus

dated 8 December 2021 (the "Prospectus"), which was approved by the Dutch Authority for the Financial

Markets (AFM), can be found on the Company’s website – www.BrigadeM3EAC.com

The Company is actively seeking to complete a Business Combination prior to the Business Combination

Deadline.

Brigade-M3 European Acquisition Corp.

Interim Directors’ Report

30 June 2022

Financial summary as at 30 June 2022:

•Escrow Account balance: $255,162,939

•Bank account balance: $522,380

•Shareholder’s equity: $5,142,443

•Share Price: $9.75 (closing price)

•Unit Price: $9.80 (closing price)

The Company earned interest income of $163,270 on its escrow account. Furthermore, the Company

generated unrealized capital gains in the Reporting Period attributable to the fair value recognition of the

warrant liabilities. The expenses incurred by the Company in the Reporting Period include, amongst others,

the Share based payment expense, the amortisation of certain IPO costs, legal costs, corporate services,

accounting and tax advisory costs, and other operating expenses. This has resulted in a loss of $15,787,220

during the Reporting Period.

Background and Strategy

The Company was formed for the purpose of effecting a Business Combination with an operating company

with significant operations in Europe which has positively benefited from a structural shift caused by the

COVID-19 pandemic or has been negatively impacted by a temporary dislocation caused by the COVID-19

pandemic. The Company focuses primarily on identifying attractive acquisition candidates with strong

business fundamentals under normalised circumstances. The Company also anticipates that these target

companies will have established a viable ESG plan for their future or recognised the potential associated

with establishing such an ESG plan, which will help drive incremental future growth and expansion as

investors and customers are demonstrating an increasing focus on sustainability as a key requirement for

investment or purchases. Accordingly, the search for Business Combination targets may extend across a

wide range of industry sectors and geographies in which the Company believes that it can create shareholder

value. The Directors believe that their and Brigade’s investment and operating expertise across multiple

industry verticals and across companies in all stages of their corporate evolution gives the Company a large,

addressable universe of potential targets in order to enable it to maximise its chances of completing a

Business Combination in a timely manner and to maximise shareholder returns following such a Business

Combination.

The Directors believe that the experience, capabilities, relationships and track record of the Directors,

Brigade and M3 will be instrumental in identifying compelling targets, making the Company an attractive

partner for potential target businesses, enhancing the Company’s ability to complete a successful Business

Combination and, thereafter, improving the performance of the post-Business Combination company in

order to create value for investors.

Notice of any Business Combination EGM, shareholder circular and/or prospectus (as applicable) and any

other meeting documents relating to a proposed Business Combination will be published on the Company’s

website (www.BrigadeM3EAC.com) no later than 21 calendar days prior to the date of the Business

Combination EGM.

Brigade-M3 European Acquisition Corp.

Interim Directors’ Report

30 June 2022

Business Outlook

Following the Company’s IPO, the Company has commenced its search for a proposed Business

Combination with a target company, to be completed within 18 months of the Company’s IPO closing on

14 December 2021.

Director Information

The Company was incorporated on 21 April 2021 as an exempted company with limited liability under the

laws of the Cayman Islands with registered number 374650.

The Company is subject to the relevant provisions of Cayman Islands law as well as its Memorandum and

Articles of Association. Additionally, the Company voluntarily applies certain principles from the Dutch

Corporate Governance Code (the “DCGC”).

As at the date of this Interim Report, the directors of the Company (the “Directors” and, together, the

“Board”): are:


Name	Position
Vijay Rajguru	Executive Director and chairman of the Board
Rosalia Portela	Executive Director
Steven P. Vincent	Non-Executive Director
Carlos Sagasta	Independent Non-Executive Director
Stephan Walz	Independent Non-Executive Director
Brenda Rennick	Independent Non-Executive Director

Further details on the directors, including their respective management experience and expertise, their

powers, responsibilities and functioning, and their mandatory disclosure obligations are set out in the

Prospectus.

Interests of the Directors

As at the date of this Interim Report, the interests in the capital instruments of the Company of the

Directors remain as disclosed in the Prospectus.

Powers, Responsibilities and Functioning

Pursuant to the Articles of Association, the Directors are granted broad authority to manage the Company’s

business and may exercise all powers in such respect. The Executive Directors manage the Company’s day-

to-day business and operations and implement its strategy. The Non-Executive Directors focus on policy

and supervising the performance of the duties of all Directors and the general state of affairs of the

Company. The Directors may take actions by unanimous written resolution or by a majority vote at a Board

meeting.

Corporate Governance

As a company incorporated under the laws of the Cayman Islands, there is no statutory corporate

governance code applicable to the Company. The laws of the Cayman Islands do however provide that

proper corporate governance has to be maintained. Notwithstanding there being no statutory corporate

governance code applicable to the Company, the Company has implemented a corporate governance

framework consisting of (i) a Board the majority of which consists of directors who, in the Company's

estimate, would qualify as independent within the meaning of best practice provision 2.1.8 of the DCGC,

were it to apply to the Company, (ii) an Audit Committee and (iii) corporate governance policies, including a

Code of Ethics, Diversity Policy, Insider Trading Policy and Corporate Governance Guidelines, each as

defined below and each of which can be viewed on the Company’s website (www.BrigadeM3EAC.com).

Audit Committee

The Board has appointed from among its Directors an Audit Committee. The Audit Committee consists of

Ms. Rennick as chairperson and Mr. Rajguru. The organisation, rules, decision-making and other internal

matters of the Audit Committee have been adopted by the Board and are set out in the Company’s Audit

Committee Charter, available on the Company’s website (www.BrigadeM3EAC.com).

Code of Ethics

The Company has adopted a code of ethics (the "Code of Ethics") requiring it to avoid, wherever possible,

all conflicts of interest, except under guidelines or resolutions approved by the Board (or the Audit

Committee, where applicable). Under the Code of Ethics, conflict of interest situations will include any

financial transaction, arrangement or relationship (including any indebtedness or guarantee of indebtedness)

involving the Company. In addition, the Audit Committee, pursuant to the terms of reference of the Audit

Committee, will be responsible for reviewing and approving related party transactions to the extent that the

Company enters into such transactions. The Company’s Code of Ethics is available on the Company’s

website (www.BrigadeM3EAC.com).

Insider Trading Policy

The Company has adopted an insider trading policy (the "Insider Trading Policy") setting out, inter alia,

prohibitions on directly or indirectly conducting or recommending transactions in Company securities while

in the possession of inside information. The Company’s Insider Trading Policy is available on the

Company’s website (www.BrigadeM3EAC.com).

Corporate Governance Guidelines

The Company has adopted corporate governance guidelines (the “Corporate Governance Guidelines”)

relating to, inter alia, (i) board composition and director qualifications; (ii) the Board’s responsibilities; (iii) the

Board’s meetings and related procedures; (iv) director communications, compensation, orientation and

continuing education; (v) leadership development; (vi) the Board’s annual performance evaluation; and (vii)

means of communicating with the Board. The Company’s Corporate Governance Guidelines are available

on the Company’s website (www.BrigadeM3EAC.com).

Corporate Social Responsibility

The Directors believe that businesses which have established a viable environmental, social and governance

(“ESG”) plan for their future, or that recognise the potential associated with establishing such an ESG plan

will experience enhanced expansion relative to those without such a commitment or opportunity for the

foreseeable future, and the Directors therefore are also focused on ensuring that the target company meets

these criteria. As a consequence, the Company takes into account sustainability and corporate social

responsibility factors when evaluating potential target businesses. The factors that will be evaluated relating

to the sustainability of the business and opportunity for enhancing such sustainability include: the practices,

products and services of the business; the production methods for the products and services, including their

relationship to a low-carbon, prosperous, equitable, healthy and safe society; the nature of revenue and the

likelihood that current earnings are “borrowing” from future earnings; and overall contribution to equality

and long-term benefit to society.

Anti-corruption and Human Rights

The Company complies with the anti-corruption and human rights laws of the countries in which it does

business. The Directors shall not take or cause to be taken any action that would reasonably result in the

Company not complying with such anti-corruption and/or human rights laws. The Directors are responsible

for ensuring that any agents appointed on the Company’s behalf are reputable and uphold the Company’s

standards in this area.

Risks and Risk Management

Risks

The Company is exposed to certain risk factors and events that may or may not occur. A summary of

certain risks is set out in the table below and should be read in conjunction with Part II of the Company’s

Prospectus (available on the Company’s website: www.BrigadeM3EAC.com), which discloses what the

Directors believe are the most material risks concerning the Company’s business, the Units, the Ordinary

Shares and the Warrants, although they may not be the only risks and uncertainties. Additional risks not

known to the Company, or currently believed not to be material, could later turn out to have a material

impact on the Company.


Risk category	Risk description	Potential impact
Strategic	The Company may face significant competition for Business Combination opportunities	Medium
Strategic	There is no assurance that the Company will identify suitable Business Combination opportunities by the Business Combination Deadline	Medium
Strategic	The ability of the Company to negotiate a Business Combination on favorable terms could be affected by the limited time to complete the Business Combination	Medium


Risk category	Risk description	Potential impact
Financial	The Company will be constrained by the potential need to finance redemptions of Ordinary Shares in connection with a Business Combination	Medium
Financial	The Company may need to arrange third-party financing and there can be no assurance that it will be able to obtain such financing, which could compel the Company to restructure or abandon a particular proposed Business Combination	Medium
Financial	If the Company’s working capital is insufficient to allow the Company to operate until the Business Combination Deadline, it could limit the amount available to fund the Company’s search for a target business and the Company may be unable to complete a Business Combination	Medium
Operational	The Company’s success is dependent upon the Directors, Brigade and/or M3 to identify and execute a Business Combination and the departure of key individuals could adversely affect the Company group of individuals and other key personnel	Medium
Operational	The Company’s search for a target business may be materially adversely affected by the coronavirus (COVID-19) pandemic as well as other adverse global health events	Medium
Operational	The Company’s search for a target business may be materially adversely affected by macroeconomic events as well as other adverse conditions on the public financial markets	Medium
Operational	Harm to the reputation of the Company, the Sponsor (or any of its affiliates) or the Directors may materially adversely affect the Company	Medium

Risk Management

The Board is ultimately responsible for maintaining effective risk management, which includes the

Company’s risk governance structure, the Company’s system of internal controls and the Company’s audit

approach.

The Company has in place a risk management and internal control system in relation to its financial

reporting process and the process of preparing the financial statements. The Board reviews the effectiveness

of the system of internal financial, operational and compliance controls and the risk management. The

Board examines whether the system of internal controls operated effectively throughout the year (taking

into account that due to the size of the Company and its limited operations, segregation of duties is generally

limited) and will make recommendations when appropriate.

The Board is of the opinion that, to the best of its knowledge:

•no deficiencies in the effectiveness of the internal risk and control systems have been identified;

•the internal risk management and control systems of the Company provide reasonable assurance that

the financial reporting as included in the financial statements do not contain any material

inaccuracies;

•there is a reasonable expectation that the Company will be able to continue its operations and meet

its liabilities as set out in the Prospectus, therefore, it is appropriate to adopt the going concern basis

in preparing the financial reporting. This opinion is based on the fact that the Board remains

focused on completing a Business Combination by the Business Combination Deadline; however,

given the time remaining to this deadline, the mandatory liquidation and subsequent dissolution

requirement, forming this opinion involves significant judgement, including that there remain no

material uncertainties related to identified events or conditions that may cast significant doubt on the

entity's ability to continue as a going concern. In addition, such opinion is not dependent on the

Company completing a Business Combination by the Business Combination Deadline.

As set out in the Prospectus, the Company is established for a period of 18 months. No matter how

comprehensive a risk management and control system may be, it cannot be assumed to be exhaustive, nor

can it provide certainty that it will prevent negative developments from occurring in the Company’s business

and business environment or that response to risk will be fully effective. The Company’s risk management

framework is designed to avoid or mitigate rather than to eliminate the risks associated with the

accomplishment of the Company’s strategic objectives. It provides reasonable assurance but not absolute

assurance against material misstatement or loss. In the Reporting Period, the Company has not identified

any major failings in its internal risk management and control system.

2022 Unaudited Condensed Interim Financial Statements (“Interim Financial Statements”)

The Directors have reviewed and discussed the June 2022 Interim Financial Statements.

The Directors believe the June 2022 Interim Financial Statements of the Company meet all requirements for

correctness and transparency.

On behalf of the Directors

29 September 2022

Vijay Rajguru

Chairman of the Board

NON-EXECUTIVE DIRECTORS’ INTERIM REPORT

The Non-Executive Directors focus on policy and supervising the performance of the duties of all Directors

and the general state of affairs of the Company. As at the date of this Interim Report, the Company’s Non-

Executive Directors are as listed below:


Name	Position
Steven P. Vincent	Non-Executive Director
Carlos Sagasta	Independent Non-Executive Director
Stephan Walz	Independent Non-Executive Director
Brenda Rennick	Independent Non-Executive Director

The Non-Executive Directors provide, inter alia, a supervisory and oversight function to the Company in

relation to its search for a Business Combination and to ensure that any decisions that are reached align with

the Company’s strategy.

The Non-Executive Directors are aware of the Company’s strategic, financial, operational, legal and

compliance risks, the internal control and management systems in place, and of the actions taken to manage

the risks.

REMUNERATION REPORT

The Directors do not receive any fixed or variable remuneration. As compensation for their services, the

Sponsor has assigned Sponsor Shares to each of the Directors (other than to Steven P. Vincent who does

not receive any compensation) at the nominal value of $0.0001 per Sponsor Share:


Name	Position	Founder Shares
Vijay Rajguru	Executive Director and chairman of the Board	25,000
Rosalia Portela	Executive Director	20,000
Steven P. Vincent	Non-Executive Director	0
Carlos Sagasta	Independent Non-Executive Director	20,000
Stephan Walz	Independent Non-Executive Director	20,000
Brenda Rennick	Independent Non-Executive Director	20,000

STATEMENT OF DIRECTORS’ RESPONSIBILITIES

The Directors are responsible for preparing the Interim Report. The Interim Report comprises the Interim

Directors’ Report, the Interim Financial Statements and some other information. The Directors are

responsible for preparing the Interim Report in accordance with applicable law and regulations. The

Directors are required by law to prepare the Interim Report for each financial year. The Directors have

prepared the Interim Report in accordance with International Financial Reporting Standards (“IFRS”). The

Directors must not approve the Interim Report unless they are satisfied that it gives a true and fair view of

the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing

the Interim Report, the Directors are required to:

•select suitable accounting policies and then apply them consistently;

•make judgements and accounting estimates that are reasonable and prudent;

•state whether applicable IFRS have been followed, subject to any material departures disclosed and

explained in the Interim Report; and

•prepare the Interim Report on the going concern basis, unless it is inappropriate to presume that

the Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and

explain the Company’s transactions and disclose, with reasonable accuracy at any time, the financial position

of the Company and enable them to ensure that the Interim Report complies with applicable law. The

Directors have assessed the effectiveness of the Company’s internal risk management and control systems.

Though such systems are designed to manage and control risks, they can provide reasonable, but not

absolute, assurance against material misstatements. Based on this assessment, to the best of our knowledge

and belief, no material failings of the effectiveness of the Company’s internal risk management and control

systems occurred and the internal risk and control systems provides reasonable assurance that the Interim

Financial Statements do not contain any errors of material importance.

Each of the Directors confirm that to the best of their knowledge:

•the Interim Financial Statements, which have been prepared in accordance with IFRS, give a true

and fair view of the assets, liabilities, financial position and profit or loss of the Company;

•the Interim Directors’ Report gives a true and fair view on the situation on the balance sheet date,

the development and performance of the business and the position of the Company of which the

financial information is included in the Interim Directors’ Report and includes a description of the

principal risks that the Company faces; and

•having taken all matters considered by the Board and brought to the attention of the Board during

the Reporting Period into account, the Directors consider that the Interim Report, taken as a whole

is fair, balanced and understandable. The Directors believe that the disclosures set out in the

Interim Report provide the information necessary for shareholders to assess the Company’s

position, performance, business model and strategy.

The Directors have reasonable expectation that the Company has adequate resources to continue in

operational existence for the foreseeable future. For this reason, the Directors consider it appropriate to

adopt the going-concern basis in preparing the Interim Report.

On behalf of the Company

29 September 2022

Vijay Rajguru

Chairman of the Board


		30 June 2022
	Not e	$

Assets
Cash	4	522,380
Cash held in escrow	8	255,162,939
Prepayments		896,276
Share capital receivable	7	625
Forward derivative agreement at fair value through profit or loss	14	12,250

Total assets		256,594,470

Shareholders' equity and liabilities
Shareholders' equity
Share capital	9	625
Share based payment reserve	17	19,652,699
Accumulated losses		(14,510,881)

Total shareholders' equity		5,142,443

Liabilities
Accrued expenses		110,508
Contingent settlement provision	13	7,173,822
Units	9	129,157,044
Redeemable ordinary shares	9	112,308,887
Public warrants	9	875,711
Sponsor warrant liabilities at fair value through profit or loss	3,9	1,826,055

Total liabilities		251,452,027
Total shareholders' equity and liabilities		256,594,470

Brigade-M3 European Acquisition Corp.

Unaudited Condensed Statement of Financial Position

30 June 2022

The notes on pages 15 to 44 form an integral part of these financial statements.


		30 June 2022
	Note	$
Income
Interest income		163,270
Net unrealised gains on financial assets and liabilities at fair value through profit or loss		12,264,270
Total income		12,427,540

Expenses
Share based payment expense	17	17,436,953
Interest expense calculated using the effective interest method		9,389,294
Formation and operational expenses	10	1,388,513

Total expenses		28,214,760

Net loss for the period		(15,787,220)

Total comprehensive loss for the period		(15,787,220)

Basic loss per share	12	($2.53)
Diluted loss per share	12	($2.53)

Brigade-M3 European Acquisition Corp.

Unaudited Condensed Statement of Comprehensive Income

For the period from 1 January 2022 to 30 June 2022

The notes on pages 15 to 44 form an integral part of these financial statements.


	Share capital	Share based payment reserve	Accumulated losses	Total
	$	$	$	$

Opening balance – 1 January 2022	625	2,215,745	1,276,339	3,492,709

Comprehensive loss for the period	-	-	(15,787,220)	(15,787,220)


Total comprehensive loss for the period	-	-	(15,787,220)	(15,787,220)

Capital transactions
Share based payment reserve	-	17,436,954	-	17,436,954

Closing balance – 30 June 2022	625	19,652,699	(14,510,881)	5,142,443

Brigade-M3 European Acquisition Corp.

Unaudited Condensed Statement of Changes in Equity

For the period from 1 January 2022 to 30 June 2022

The notes on pages 15 to 44 form an integral part of these financial statements.


			2022 $

Cash flows from operating activities:
Net loss for the period			(15,787,220)
Adjustments to reconcile net loss for the period to net cash used in operating activities:
Adjustment for: Net unrealised gains on financial assets and liabilities at fair value through profit or loss			(12,264,270)
Share based payment expense			17,436,953
Interest expense calculated using the effective interest method			9,389,294
Interest income on escrow			(162,939)
Underwriting discount expense			788,185
Changes in:
Prepayments			289,829
Accrued expenses			(82,967)
Net cash used in operating activities			(393,135)

Net change in cash			(393,135)
Cash at beginning of the period			915,515
Cash at end of the period			522,380

Brigade-M3 European Acquisition Corp.

Unaudited Condensed Statement of Cash Flows

For the period from 1 January 2022 to 30 June 2022

The notes on pages 15 to 44 form an integral part of these financial statements.

1.General information

Brigade-M3 European Acquisition Corp. (the “Company”) is an exempted company with limited liability,

incorporated under the laws of the Cayman Islands on 21 April 2021 (date of incorporation). The

Company is registered as exempted because its objects are to be carried out mainly outside the Cayman

Islands. With effect from 17 June 2021, the name of the Company was changed from Brigade European

Acquisition Corp. to Brigade-M3 European Acquisition Corp. The Company is a Special Purpose

Acquisition Company (“SPAC”), formed for the purpose of effecting a merger, share exchange, asset

acquisition, share purchase, reorganisation or similar business combination (a “Business Combination”)

with an operating company with significant operations in Europe which has positively benefited from a

structural shift caused by the COVID-19 pandemic or has been negatively impacted by a temporary

dislocation caused by the COVID-19 pandemic.

The Company is registered with the Registrar of Companies under incorporation number 374650 and

has its registered office in Grand Cayman, Cayman Islands. Brigade SPAC Sponsor II LLC is the

Company's sponsor (the “Sponsor Entity”).

The Company has been listed on the Euronext Amsterdam Stock Exchange (“Euronext Amsterdam”) as

of 8 December 2021, having raised US$ 250,000,000 in its IPO of 25,000,000 units at US$ 10 per unit

(the “Offering”). An over-allotment option existed but was not exercised. These proceeds were placed in

an escrow account as outlined in the prospectus. Each unit is exchangeable for one (1) redeemable

ordinary share and one-half (½) of a public warrant.

The Company has no employees as at 30 June 2022.

2.Summary of significant accounting policies

The principal accounting policies applied in the preparation of these financial statements are set out

below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

2.1Basis of preparation

These interim financial statements for the six months ended 30 June 2022 have been prepared in

accordance with IAS 34 Interim Financial Reporting, and should be read in conjunction with the

Company’s last annual consolidated financial statements as at and for the period ended 31 December

2021 (‘last annual financial statements’). They do not include all of the information required for a

complete set of financial statements prepared in accordance with IFRS Standards. However, selected

explanatory notes are included to explain events and transactions that are significant to an understanding

of the changes in the Company’s financial position and performance since the last annual financial

statements.

2.2Use of estimates and judgements

In preparing these financial statements, management has made judgements, estimates and assumptions

that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities

at the date of the financial statements and the reported amounts of increases and decreases in net assets

resulting from operations during the reporting period. Actual results could differ from these estimates.

Brigade-M3 European Acquisition Corp.

Notes to the Financial Statements

31 December 2021

2.Summary of significant accounting policies (continued)

2.2Use of estimates and judgements (continued)

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are

recognised prospectively.

Judgements

Information about judgements made in applying accounting policies that have the most significant

effects on the amounts recognised in the financial statements is included in the following notes:

•Note 2.3 – Going concern

•Note 2.5 – Determination of functional currency

Assumptions and estimation uncertainties

Information about assumptions and estimation uncertainties made in applying accounting policies that

have the most significant effects on the amounts recognised in the financial statements is included in the

following notes:

•Note 3 – Fair value measurement

•Note 13 – Contingent settlement provision

•Note 17 – Share based payment – probability of business combination and identification of grant

date

2.3Going concern

The interim financial statements have been prepared on a going concern basis. Following the Offering

and prior to the completion of any Business Combination, the Company will not engage in any

operations, other than in connection with the selection, structuring and completion of a Business

Combination.

The Company has 18 months from 14 December 2021 (“Settlement Date”) to complete a Business

Combination, (the “Business Combination Deadline”). The costs related to the Company are expected to

be covered by the proceeds of the issuance of the sponsor warrants as part of the Offering process, as

disclosed in Note 9.

The Sponsor Entity or its affiliates may fund any excess costs through the issuance of debt instruments

to the Company, such as promissory notes, and up to $1,500,000 of such debt instruments may be

converted into additional sponsor warrants at a price of $1.00 per sponsor warrant at the option of the

Sponsor Entity.

If the Company has not completed a Business Combination by such time, it will: (i) cease all operations

except for the purpose of winding up; (ii) as promptly as reasonably possible redeem the units and

ordinary shares; and (iii) as promptly as reasonably possible following such redemption, subject to the

approval of the remaining shareholders and the 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.

Brigade-M3 European Acquisition Corp.

Notes to the Interim Financial Statements

30 June 2022

2.Summary of significant accounting policies (continued)

2.3Going concern (continued)

The events and conditions that management considers relevant to the Company’s ability to continue as a

going concern include the limited time frame remaining to the Business Combination Deadline and

market conditions inclusive of competition and potential geopolitical events.

Management remain focused on completing a Business Combination by the Business Combination

Deadline. Having considered all relevant information, management have concluded that there are no

material uncertainties related to the identified events or conditions that may cast significant doubt on the

Company’s ability to continue as a going concern. Reaching the conclusion that there is no material

uncertainty involves significant judgement.

In addition, such opinion is not dependent on the Company completing a Business Combination by the

Business Combination Deadline. It is important to note that nothing in this analysis implies that the

Company would be unable to meet its debts as they fall due or to fulfil the above mentioned

redemptions of redeemable ordinary shares should the Company not complete a Business Combination

by the Business Combination Deadline.

2.4New accounting developments

There are no new accounting developments which are expected to have a significant impact on

the Company's financial condition or results of operations.

2.5Functional and presentation currency

(i)Functional currency

Functional currency is the currency of the primary economic environment in which the Company

operates. The majority of the Company’s transactions are denominated in USD. The majority of

expenses are denominated and paid in USD. While shares were originally issued in EUR, on 2

December 2021 they were redenominated to USD, as disclosed in Note 9. Accordingly,

management has determined that the functional currency of the Company is USD.

(ii)Transactions and balances

Transactions in foreign currencies are translated into USD at the exchange rate at the dates of the

transactions. Foreign currency assets and liabilities are translated into USD using the exchange rate

prevailing at the reporting date.

Brigade-M3 European Acquisition Corp.

Notes to the Interim Financial Statements

30 June 2022

2.Summary of significant accounting policies (continued)

2.6Financial instruments

(i)Recognition and initial measurement

The Company initially recognises financial assets and financial liabilities on the date it becomes a

party to the contractual provisions of the instrument. Any gains and losses arising from changes in

fair value of the financial assets or financial liabilities at fair value through profit or loss

(“FVTPL”) are recorded in the statement of comprehensive income.

Financial assets and financial liabilities are measured initially at fair value plus or minus, for an item

not at FVTPL, transaction costs that are directly attributable to its acquisition or issue.

(ii)Classification and subsequent measurement

Financial assets

On initial recognition, the Company classifies financial assets as measured at amortised cost or

FVTPL.

A financial asset is measured at amortised cost if it meets both of the following conditions and is

not designated as at FVTPL:

-It is held within a business model whose objective is to hold assets to collect contractual

cash flows; and

-Its contractual terms give rise on the specified dates to cash flows that are solely

payments of principal and interest.

All financial assets not classified as measured at amortised cost as described above are measured at

FVTPL.

Financial assets classified at amortised cost are subsequently measured at amortised cost using the

effective interest method. The amortised cost is reduced by impairment losses. Interest income,

foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss

on derecognition is recognised in profit or loss.

Financial assets classified at FVTPL are subsequently measured at fair value. Net gains and losses,

including any interest income and foreign exchange gains and losses, are recognised in profit or

loss.

Brigade-M3 European Acquisition Corp.

Notes to the Interim Financial Statements

30 June 2022

2.Summary of significant accounting policies (continued)

2.6Financial instruments (continued)

(ii)Classification and subsequent measurement (continued)

Financial liabilities

Financial liabilities are classified as measured at amortised cost or FVTPL.

A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or

it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair

value and net gains or losses, including any interest, are recognised in profit or loss.

Other financial liabilities are subsequently measured at amortised cost using the effective interest

method. Interest expense and foreign exchange gains and losses are recognised in profit or loss.

Any gain or loss on derecognition is also recognised in profit or loss.

(iii)Amortised cost

The amortised cost of a financial asset or financial liability is the amount at which the financial

asset or financial liability is measured on initial recognition minus the principal repayments, plus or

minus the cumulative amortisation using the effective interest method of any difference between

that initial amount and the maturity amount and, for financial assets, adjusted for any loss

allowance.

(iv)Fair value measurement

‘Fair value’ is the price that would be received to sell an asset or paid to transfer a liability in an

orderly transaction between market participants at the measurement date in the principal or, in its

absence, the most advantageous market to which the Company has access at that date. The fair

value of a liability reflects its non-performance risk.

When available, the Company measures the fair value of an instrument using the quoted price in

an active market for that instrument. A market is regarded as ‘active’ if transactions for the asset or

liability take place with sufficient frequency and volume to provide pricing information on an

ongoing basis. The Company measures instruments quoted in an active market at a mid-price,

because this price provides a reasonable approximation of the exit price.

If there is no quoted price in an active market, then the Company uses valuation techniques that

maximise the use of relevant observable inputs and minimise the use of unobservable inputs. The

chosen valuation technique incorporates all of the factors that market participants would take into

account in pricing a transaction.

The Company recognises transfers between levels of the fair value hierarchy as at the end of the

reporting period during which the change has occurred.

Brigade-M3 European Acquisition Corp.

Notes to the Interim Financial Statements

30 June 2022

2.Summary of significant accounting policies (continued)

2.6Financial instruments (continued)

(v)Impairment

The Company recognises loss allowances for expected credit losses (“ECLs”) on financial assets

measured at amortised cost.

The Company measures loss allowances at an amount equal to lifetime ECLs, except for the

following, which are measured at 12-month ECLs:

•financial assets that are determined to have low credit risk at the reporting date; and

•other financial assets for which credit risk has not increased significantly since initial

recognition.

When determining whether the credit risk of a financial asset has increased significantly since

initial recognition and when estimating ECLs, the Company considers reasonable and supportable

information that is relevant and available without undue cost or effort. This includes both

quantitative and qualitative information and analysis, based on the Company’s historical

experience and informed credit assessment and including forward-looking information.

The Company assumes that the credit risk on a financial asset has increased significantly if it is

more than 30 days past due.

The Company considers a financial asset to be in default when:

•the borrower is unlikely to pay its credit obligations to the Company in full, without recourse

by the Company to actions such as realizing security (if any is held); or

•the financial asset is more than 90 days past due.

The Company considers a financial asset to have low credit risk when the credit rating of the

counter party is equivalent to the globally understood definition of ‘investment grade’. The

Company considers this to be BBB or higher per Standard and Poor’s.

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a

financial instrument. 12-month ECLs are the portion of ECLs that result from default events that

are possible within the 12 months after the reporting date (or a shorter period if the expected life

of the instrument is less than 12 months).

The maximum period considered when estimating ECLs is the maximum contractual period over

which the Company is exposed to credit risk.

Brigade-M3 European Acquisition Corp.

Notes to the Interim Financial Statements

30 June 2022

2.Summary of significant accounting policies (continued)

2.6Financial instruments (continued)

(v)Impairment (continued)

Measurement of ECLs

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the

present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in

accordance with the contract and the cash flows that the Fund expects to receive). ECLs are

discounted at the effective interest rate of the financial asset.

Credit-impaired financial assets

At each reporting date, the Company assesses whether financial assets carried at amortised cost are

credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a

detrimental impact on the estimated future cash flows of the financial asset have occurred.

Evidence that a financial asset is credit-impaired includes the following observable data:

•significant financial difficulty of the borrower or issuer;

•a breach of contract such as a default or being more than 90 days past due; or

•it is probable that the borrower will enter bankruptcy or other financial reorganisation.

Presentation of allowance for ECLs in the statement of financial position

Loss allowances for financial assets measured at amortised cost are deducted from the gross

carrying amount of the assets.

Write-off

The gross carrying amount of a financial asset is written off when the Company has no reasonable

expectations of recovering a financial asset in its entirety or a portion thereof.

Brigade-M3 European Acquisition Corp.

Notes to the Interim Financial Statements

30 June 2022

2.Summary of significant accounting policies (continued)

2.6Financial instruments (continued)

(vi)Derecognition

The Company derecognises a financial asset when the contractual rights to the cash flows from

the asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in

which substantially all of the risks and rewards of ownership of the financial asset are transferred

or in which the Company neither transfers nor retains substantially all of the risks and rewards of

ownership and does not retain control of the financial asset.

The Company derecognises a financial liability when its contractual obligations are discharged or

cancelled, or expire. On derecognition of a financial liability, the difference between the carrying

amount extinguished and the consideration paid (including any non-cash assets transferred or

liabilities assumed) is profit or loss.

2.7Forward derivative agreements

The forward derivative agreements are instruments that give the Company the right, but not the

obligation to issue ("put") ordinary shares at a specified price (the "exercise price") on or before a

predetermined date when such right is exercised by cash settlement.

The value of the forward derivative agreement has two components: time value and intrinsic value. A

forward derivative agreement has a limited life and expires on a certain date. As the expiration date of a

forward derivative agreement approaches, the time value of a forward derivative agreement will decline.

In addition, if the share underlying the forward derivative agreement increases in price, the intrinsic value

of an in the money forward derivative agreement will decline. Further, if the price of the share

underlying the forward derivative agreement exceeds the exercise price of the forward derivative

agreement, the forward derivative agreement will expire worthless.

2.8Cash

Cash represents cash deposits held at financial institutions. Cash is held at major financial institutions.

Brigade-M3 European Acquisition Corp.

Notes to the Interim Financial Statements

30 June 2022

2.Summary of significant accounting policies (continued)

2.9Share capital receivable

Share capital receivable relates to an amount due from the shareholder for the equity contribution. As

collection is expected in one year or less, they are classified as current assets.

Share capital receivable is recognised initially at fair value. The best evidence of the fair value of share

capital receivable is at transaction price, the amount of consideration that is unconditional, unless it

contains significant financing components when it is recognised at fair value. Subsequent measurement is

at amortised cost using the effective interest method, less any loss allowance.

2.10Prepayments

These represent assets for amounts paid prior to the end of the financial period, for which services are

yet to be provided to the Company. Prepayments are presented as current assets unless the service is not

due to be provided within 12 months after the reporting period.

2.11Accrued expenses

These amounts represent liabilities for services provided to the Company prior to the end of the financial

period, which are unpaid. Accrued expenses are presented as current liabilities unless payment is not due

within 12 months after the reporting period.

Accrued expenses are recognised initially at fair value. The best evidence of the fair value of a financial

instrument at initial recognition is normally the transaction price. Subsequent measurement is at

amortised cost using the effective interest method.

2.12Cash held in escrow

Cash held in escrow is subject to legal or contractual restriction by third parties as well as restriction as to

withdrawal or use, including restrictions that require the cash to be used for a specified purpose and

restrictions that limit the purpose for which this cash can be used.

Brigade-M3 European Acquisition Corp.

Notes to the Interim Financial Statements

30 June 2022

2.Summary of significant accounting policies (continued)

2.13Units

Units comprise of redeemable ordinary shares and public warrants. Each unit is exchangeable for one (1)

redeemable ordinary share and one-half (½) of a public warrant.

Redeemable ordinary shares

Redeemable ordinary shares are redeemable at the shareholder's option and are classified as financial

liabilities.

Redeemable ordinary shares are recognised initially at fair value. The best evidence of the fair value of a

financial instrument at initial recognition is normally the transaction price. Subsequent measurement is at

amortised cost using the effective interest method.

The ‘effective interest rate’ is calculated on initial recognition of a financial instrument as the rate that

exactly discounts estimated future cash payments or receipts through the expected life of the financial

instrument to:

-the gross carrying amount of the financial asset; or

-the amortised cost of the financial liability.

In calculating amortisation expense, the effective interest rate is applied to the amortised cost of the

liability.

Any amortisation expense on financial liabilities measured at amortised cost is presented in the

statement of comprehensive income as interest expense calculated using the effective interest method.

Public warrants

The public warrants are classified as derivative liabilities measured at FVTPL at each reporting period, in

accordance with IFRS 9 – Financial Instruments (“IFRS 9”) and IAS 32 – Financial Instruments: Presentation

(“IAS 32”).

Public warrants are recognised initially at fair value. The fair value of public warrants at initial

recognition was determined by a valuation specialist.

Subsequent measurement is at FVTPL with changes in the fair value recorded in the statement of

comprehensive income.

2.14Sponsor shares

Sponsor shares are not redeemable, do not receive any proceeds on liquidation and are classified as

equity in the statement of financial position.

Sponsor shares are recognised initially at cost. The best evidence of the cost of an equity instrument at

initial recognition is normally the transaction price.

Brigade-M3 European Acquisition Corp.

Notes to the Interim Financial Statements

30 June 2022

2. Summary of significant accounting policies (continued)

2.15Sponsor warrants

The sponsor warrants are classified as derivative liabilities measured at FVTPL at each reporting period,

in accordance with IFRS 9 – Financial Instruments (“IFRS 9”) and IAS 32 – Financial Instruments:

Presentation (“IAS 32”).

Sponsor warrants are recognised initially at fair value. The fair value of sponsor warrants at initial

recognition was determined by a valuation specialist.

Subsequent measurement is at FVTPL with changes in the fair value recorded in the statement of

comprehensive income.

2.16Share based payment reserve

The Sponsor Entity provides services in the form of expertise to assist the Company to identify a

suitable candidate for a Business Combination. In accordance with IFRS 2 – Share-based Payments (“IFRS

2”), the Company will recognise a share based payment expense as it is being provided with services in

the form of expertise from the Sponsor Entity.

The grant-date fair value of equity-settled share based payment arrangements is recognised as an expense

in the statement of comprehensive income with a corresponding increase in a separate reserve within

equity. Service and non-market performance conditions attached to the sponsor shares are not taken into

account in estimating fair value. The total expense is recognised over the vesting period, which is the

period over which all of the specified vesting conditions are to be satisfied.

2.17Taxation

The Company is exempt from all forms of taxation in the Cayman Islands. However, in some

jurisdictions, dividend income, interest income and capital gains may be subject to withholding tax

imposed in the country of origin. The Company presents withholding tax separately from the dividend

income, interest income and investment income in the statement of comprehensive income.

In accordance with IAS 12 - Income taxes (“IAS 12”), the Company is required to recognise a tax liability

when it is probable that the tax laws of foreign countries require a tax liability to be assessed on the

Company’s capital gains sourced from such foreign country, assuming the relevant taxing authorities

have full knowledge of all the facts and circumstances. The tax liability is then measured at the amount

expected to be paid to the relevant taxation authorities, using the tax laws and rates that have been

enacted or substantively enacted by the end of the reporting period. There is sometimes uncertainty

about the way enacted tax law is applied to offshore investment companies. This creates uncertainty

about whether or not a tax liability will ultimately be paid by the Company. Therefore, when measuring

any uncertain tax liabilities, management considers all of the relevant facts and circumstances available at

the time that could influence the likelihood of payment, including any formal or informal practices of the

relevant tax authorities.

Brigade-M3 European Acquisition Corp.

Notes to the Interim Financial Statements

30 June 2022

2.Summary of significant accounting policies (continued)

2.17Taxation (continued)

The Company considers interest and penalties on related tax liabilities to be an inseparable element of

the tax liability and accounts for interest and penalties as if they are within the scope of IAS 12. These

amounts would be included within the tax line in the statement of comprehensive income, and the

liability would be included within the income tax liability on the statement of financial position.

2.18Related parties

A party is considered to be related to the Company if:

(i)the party is a person or a close member of that person’s family and that person

•has control or joint control over the Company;

•has significant influence over the Company; or

•is a member of the key management personnel of the Company or of a parent of the Company;

(ii)the party is an entity where any of the following conditions applies:

•the entity and the Company are members of the same group;

•one entity is an associate or joint venture of the other entity (or of a parent, subsidiary or fellow

subsidiary of the other entity);

•the entity and the Company are joint ventures of the same third party;

•one entity is a joint venture of a third entity and the other entity is an associate of the third

entity;

•the entity is a post-employment benefit plan for the benefit of employees of either the

Company or an entity related to the Company;

•the entity is controlled or jointly controlled by a person identified in (i); and

•a person identified in (i) has significant influence over the entity or is a member of the key

management personnel of the entity (or of a parent of the entity).

2.19Offering costs

Offering costs consist of costs that are directly related to the Offering and share issuance.

These costs have been charged to the applicable financial instrument using a reasonable allocation

methodology, whether to shareholders’ equity or financial liability, upon issuance of the associated

financial instruments. If the associated financial instrument is a financial liability carried at amortised

cost, the offering costs will be capitalised. If the financial liability is subsequently carried at FVTPL,

offering costs are expensed.

All offering costs were allocated to the applicable financial instruments for the respective financial

periods.

Brigade-M3 European Acquisition Corp.

Notes to the Interim Financial Statements

30 June 2022

3.Fair value measurement

A number of the Company’s accounting policies and disclosures require the measurement of fair values

for financial assets and liabilities.

The Company has an established control framework with respect to the measurement of fair values. This

includes a valuation specialist who reports directly to the Board. The Board has overall responsibility for

overseeing all significant fair value measurements, including Level 3 fair values.

The management team regularly reviews significant unobservable inputs and valuation adjustments. If

third party information, such as broker quotes or pricing services, is used to measure fair values, then the

management team assesses the evidence obtained from the third parties to support the conclusion that

these valuations meet the requirements of the Standards, including the level in the fair value hierarchy in

which the valuations should be classified.

The Company measures fair values using the following fair value hierarchy that reflects the significance

of the inputs used in making the measurements.


Level 1 -	Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 -	Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices).
Level 3 -	Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly

transaction between market participants at the measurement date in the principal or, in its absence, the

most advantageous market to which the Company has access at that date. The fair value of a liability

reflects its non-performance risk.

When measuring the fair value of an asset or liability, the Company uses observable market data as far as

possible. The determination of what constitutes “observable” requires significant judgement by

management. Fair values of financial assets and liabilities that are traded in active markets are based on

quoted market prices or price quotations from a broker that provides an unadjusted price from an active

market for identical instruments. A market is regarded as “active” if transactions for the asset or liability

take place with sufficient frequency and volume to provide pricing information on an on-going basis.

The determination of fair value for financial assets and financial liabilities for which there is no

observable market price requires the use of valuation techniques. For financial instruments that trade

infrequently and have little price transparency, fair value is less objective, and requires varying degrees of

judgement depending on liquidity, concentration, uncertainty of market factors, pricing assumptions and

other risks affecting the specific instrument.

The objective of valuation techniques is to arrive at a fair value measurement that reflects the price that

would be received to sell the asset or paid to transfer the liability in an orderly transaction between

market participants at the measurement date.

Brigade-M3 European Acquisition Corp.

Notes to the Interim Financial Statements

30 June 2022

3.Fair value measurement (continued)

Valuation techniques

If there is no quoted price in an active market, then the Company uses valuation models such as Black

Scholes Option Pricing Model which has been used in valuing sponsor warrants and the Monte Carlo

Simulation Model for valuing public warrants. These models maximise the use of relevant observable

inputs and minimise the use of unobservable inputs. These valuation techniques incorporate all of the

factors that market participants would take into account in pricing a transaction. They will also consider

or take into account the contract terms (including the strike price and contract maturity) and multiple

inputs (including the price of the Company's ordinary shares, volatility, risk-free rate and the term to the

Company's business combination). Valuation techniques include the use of methods to determine key

inputs such as volatility. Volatility is assessed by comparison with similar instruments for which

observable market prices exist.

Valuation models that employ significant unobservable inputs require a higher degree of management

judgement and estimation in the determination of fair value. Management judgement and estimation are

usually required for the selection of the appropriate valuation model to be used.

The fair value of the financial instruments are determined by the Board upon consultation with a

valuation specialist with reference to significant unobservable inputs. Fair values reflect the credit risk of

the Company and the instruments themselves.

The valuation specialist has used a net present valuation calculation in determining the fair value of the

forward derivative agreement, incorporating the present value of funding cost, expected term and the

risk-free rate, to value this financial instrument.

In order to value the public warrants, the valuation specialist has used a Monte Carlo Simulation Model

because this can explicitly model the possibility of redemption at the option of the Company. Which can

happen at any point within the public warrant’s exercise period. The Black Scholes Option Pricing Model

was instead considered in determining the value of sponsor warrants because the path-dependent nature

of the redemption provisions do not apply to the sponsor warrants.

Brigade-M3 European Acquisition Corp.

Notes to the Interim Financial Statements

30 June 2022

3.Fair value measurement (continued)

Fair value hierarchy – Financial instruments measured at FVTPL

The following table summarises the valuation of the Company’s financial instruments within the fair

value hierarchy levels at 30 June 2022:


	Level 1	Level 2	Level 3	Total
	$	$	$	$
Financial assets at fair value through profit or loss
Forward purchase agreement	-	-	12,250	12,250
	-	-	12,250	12,250

Financial liabilities at fair value through profit or loss
Public warrant liabilities	-	-	875,711	875,711
Public warrant liabilities, included in units	-	-	999,289	999,289
Sponsor warrant liabilities	-	-	1,826,055	1,826,055
	-	-	3,701,055	3,701,055

Changes in level 3 measurements

The following table presents the changes in the Company’s financial instruments classified in Level 3 of

the fair value hierarchy for the period ended 30 June 2022:


	2022	2022
	$	$
	Forward purchase agreement	Warrants

Beginning of period	1,841,750	(17,794,825)
Net unrealised (loss)/gain at fair value through profit or loss	(1,829,500)	14,093,770
End of period	12,250	(3,701,055)

There were no transfers between levels for the period.

Brigade-M3 European Acquisition Corp.

Notes to the Interim Financial Statements

30 June 2022

3.Fair value measurement (continued)

The following table summarises the valuation techniques and significant unobservable inputs used for

the Company’s financial instruments classified in Level 3 as of 30 June 2022:


	Fair value $	Valuation technique	Unobservable inputs	Range of inputs (weighted average)

Warrant liabilities	3,701,055	Monte Carlo Simulation Model & Black Scholes Option Pricing Model	Expected volatility	0.4%

The forward derivative agreement has not been included in the above table because it was valued based

on either observable market inputs or unobservable inputs that were not deemed to be significant.

Although management believes that its estimates of fair value are appropriate, the use of different

methodologies or assumptions could lead to different measurements of fair value. For warrant liabilities,

an increase or decrease of 5% in the fair value would have the following effects on net income for the

period:


	2022 $ Favorable	2022 $ Unfavorable
Public warrant liabilities at FVTPL	93,750	(93,750)
Sponsor warrant liabilities at FVTPL	91,303	(91,303)

The favorable and unfavorable effects of using reasonably possible alternative assumptions for the

valuation of warrant liabilities have been calculated by recalibrating the model values using unobservable

inputs. The most significant unobservable input is expected volatility which uses implied volatilities from

selected comparable publicly traded warrants. The model was recalibrated using a volatility range based

on the resulting distribution of implied volatilities. The actual assumption used in the valuation was 0.4%

for both the public warrants and the sponsor warrants.

Brigade-M3 European Acquisition Corp.

Notes to the Interim Financial Statements

30 June 2022

4.Cash


			2022 $
Current account			522,380
Total cash			522,380

The amounts available to the Company in the current account are used to fund the operational costs

related to the Offering, working capital and Business Combination.

5.Financial risk management

The Audit Committee monitors the effectiveness of the Company's internal control systems, internal

audit system and risk management system with respect to financial reporting. Financial risks principally

include market risk, liquidity risk and credit risk. There has been no change during the period to the

manner in which these risks are managed and measured.

5.1.Market risk management

Market risk is the risk that the value of financial assets will fluctuate as a result of changes in market

prices whether those changes are caused by factors specific to the individual assets or factors affecting all

assets in the market. Market risk includes interest, currency and other market price risk.

Interest risk

As at 30 June 2022, the majority of the Company’s restricted cash held in escrow is held in an interest-

bearing account denominated in USD. As such, the Company is primarily exposed to the financial risks

associated with the effects of fluctuations in the prevailing levels of interest rates on its financial position

and cash flows.

A cash flow sensitivity analysis for the variable rate cash held in escrow has not been included because it

is not deemed significant.

Currency risk

As at 30 June 2022, the Company did not hold any financial assets or financial liabilities denominated in

currencies other than its functional currency. Consequently, the Company is not directly exposed to risks

associated with fluctuating exchange rates. As the Company has minimal exposure to currency risk,

management considers that no foreign exchange rate sensitivity analysis is required.

Brigade-M3 European Acquisition Corp.

Notes to the Interim Financial Statements

30 June 2022

5.Financial risk management (continued)

5.1.Market risk management (continued)

Other market price risk

As at 30 June 2022, the Company holds financial assets and financial liabilities that are valued by the

valuation specialists including the forward derivative agreement, sponsor warrants and public warrants,

included in units. These financial assets and financial liabilities are measured at fair value using the

unobservable inputs and therefore a sensitivity analysis of other marker price risk is not relevant.

5. 2.Liquidity risk management

Liquidity risk is the risk that the Company may not be able to generate sufficient cash resources to settle

its obligations in full as they fall due or can only do so on terms that are materially disadvantageous.

The Company’s liquidity needs were satisfied prior to the completion of the Offering through receipt of

$10,850,000 from the issuance of sponsor warrants, of which $3,350,000 was allocated to the payment of

Company expenses. As at 30 June 2022, the cash available in the current account, amounting to $522,380

will be used to settle the operational costs of the Company.

Units are convertible into redeemable ordinary shares and public warrants. The Company is then

obligated to offer holders of its redeemable ordinary shares with validly exercised redemption rights the

right to redeem their ordinary shares for cash at the time of the Business Combination or to redeem

100% of the ordinary shares if the Company does not complete a Business Combination by the Business

Combination Deadline. The Company will provide its ordinary shareholders with the opportunity to

redeem all or a portion of their ordinary shares upon the completion of the Business Combination,

irrespective of whether and how they vote at the general meeting convened to approve the Business

Combination.

If the Company fails to complete its Business Combination prior to the Business Combination Deadline,

it will redeem the redeemable ordinary shares, at a per-share price, payable in cash, equal to the aggregate

amount then on deposit in escrow, including interest earned on the funds held in escrow divided by the

number of then outstanding ordinary shares.

The Company does not currently believe that it will need to raise additional funds in order to meet the

expenditure required for operating its business until the completion of the Business Combination.

However, it may need to raise additional funds, if such funds were to be required to complete the

Business Combination and/or to finance the redemption of the redeemable ordinary shares. The

Sponsor Entity has the option to fund any excess costs through the issuance of debt instruments to the

Company, such as promissory notes. Up to $1,500,000 of such debt instruments may be converted into

additional sponsor warrants at a price of $1.00 per sponsor warrant at the option of the Sponsor Entity.

Other than as contemplated above, the Company does not intend to raise additional financing or debt

prior to the completion of the Business Combination.

Brigade-M3 European Acquisition Corp.

Notes to the Interim Financial Statements

30 June 2022

5.Financial risk management (continued)

5. 2.Liquidity risk management (continued)

The table below summarises the maturity profile of the Company’s financial liabilities at 30 June 2022.


	Less than 3 months $	3 - 12 months $	12 - 18 months $	Total $
Liabilities
Redeemable ordinary shares	-	112,308,887	-	112,308,887
Redeemable ordinary shares, included in units	-	128,157,755	-	128,157,755
Public warrant liabilities at fair value through profit or loss	-	875,711	-	875,711
Public warrant liabilities at fair value through profit or loss, included in units		999,289		999,289
Sponsor warrant liabilities at fair value through profit or loss	-	1,826,055	-	1,826,055
Contingent settlement provision	-	7,173,822	-	7,173,822
Accrued expenses	-	110,508	-	110,508
	-	251,452,027	-	251,452,027

5. 3.Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in

financial loss to the Company.

The majority of the assets of the Company comprise cash and cash held in escrow that is held in separate

trust accounts with HSBC and Goldman Sachs. The probability of default of these custodians is deemed

low based on the following credit ratings as at 30 June 2022:


Credit Ratings	Balance as at 30 June 2022 ($)	Moody's	Standard & Poor's	Fitch
Goldman Sachs	522,380	A3	BBB+	A
HSBC	255,162,939	A2	A-	A+
	255,685,319

Brigade-M3 European Acquisition Corp.

Notes to the Interim Financial Statements (continued)

30 June 2022

5.Financial risk management (continued)

5. 3.Credit risk management (continued)

Counterparty risk

The Company is exposed to counterparty risk from the potential failure of Brigade-M3 European FPA

L.P, a related party, to settle the exercised forward derivative agreement. The maximum risk of loss from

counterparty risk to the Company is the fair value of the derivative contract. The Company considers the

effects of counterparty risk when determining the fair value of its forward agreement derivative. Forward

derivative agreements are recognised initially at fair value. Subsequent to initial recognition they are

measured at FVTPL.

5. 4.Capital risk management

The Sponsor Entity or its affiliates may fund any excess costs through the issuance of debt instruments

to the Company, as disclosed in note 5.2.

6.Acquisition

The Company made no acquisitions during the period ended 30 June 2022.

7.Share capital receivable

Share capital receivable relates to a receivable from the Sponsor Entity for its equity contribution. At 30

June 2022, the subscription receivable carrying amount of $625 approximates fair value due to the short-

term nature of the asset.

8.Cash held in escrow

Cash held in the interest bearing escrow account comprise 100% of the proceeds from the Offering and,

in the event that the Business Combination is successful, will be used to satisfy the cash requirements of

the Business Combination, including funding the purchase price, paying related expenses and retaining

specified amounts to be used by the post-Business Combination company for working capital or other

purposes.

As per the Company's prospectus, the Company will have legal ownership of the cash amounts

contributed by ordinary and sponsor shareholders, and the Board will have the authority and power to

spend such amounts. In an effort to ensure that the amounts committed by ordinary shareholders are

used for no other purposes as described above, the Company has entered into an escrow agreement with

HSBC Bank Plc to create a variable interest escrow account.

The gross proceeds from the Offering are deposited in the escrow account and the amounts held in the

escrow account are held in cash. The total balance in the escrow account at 30 June 2022 was

$255,162,939, of which $250,000,000 is held for the Business Combination and $5,000,000 relates to an

escrow overfunding, expected to be $0.20 per ordinary share and $162,939 which relates to interest

earned on the account.

Brigade-M3 European Acquisition Corp.

Notes to the Interim Financial Statements (continued)

30 June 2022

9.Capital instruments

9.1 Authorised share capital

The authorised share capital of the Company at 30 June 2022 is $53,000 divided into 250,000,000

ordinary shares of a par value of $0.0001 each, 30,000,000 sponsor shares of a par value of $0.0001 each

and 250,000,000 unit shares of a par value of $0.0001. The sponsor shares were originally issued in EUR

but they were redenominated into USD by way of an ordinary resolution on 2 December 2021.

9.2 Sponsor shares

On 21 April 2021, the single sponsor share issued on incorporation was surrendered for no

consideration and cancelled. On 13 May 2021, the Company issued 7,187,500 sponsor shares of €0.0001

(“Euro Sponsor Shares”) to the Sponsor Entity at their par value. While shares were originally issued in

EUR, on 2 December 2021 they were redenominated to USD. On 22 December 2021, 937,500 of the

total sponsor shares acquired by the Sponsor Entity were forfeited for no consideration. The total

remaining 6,250,000 sponsor shares, held by the Sponsor Entity and the Directors, constitute the

Company's sole equity as at 30 June 2022.

The sponsor shares shall automatically convert into ordinary shares, subject to the satisfaction of certain

performance-related conditions.

The sponsor shares will rank pari passu with each other and holders of the sponsor shares will be entitled

to dividends and other distributions declared and paid on them. Each sponsor share carries the

distribution and liquidation rights as included in the articles of association and the right to attend and to

cast one vote at a general meeting of the Company (including at the Business Combination general

meeting), however, the Sponsor Entity and the Directors have entered into a letter agreement with the

Company pursuant to which they have waived their rights to liquidating distributions from cash held in

escrow with respect to sponsor shares if the Company does not complete a Business Combination by the

Business Combination Deadline. The sponsor shares will not be admitted to listing or trading on any

trading platform.

The Sponsor Entity and the Directors are unable to transfer any sponsor shares until the earlier a) of one

year after the Business Combination completion date and b) subsequent to the Business Combination, x)

if the last reported sale price of the ordinary shares exceeds $12.00 per ordinary share for any 20 trading

days within any 30 trading day period commencing at least 150 calendar days after the Business

Combination completion date or y) the date following the consummation of the Business Combination

on which the Company completes a strategic transaction.

Brigade-M3 European Acquisition Corp.

Notes to the Interim Financial Statements (continued)

30 June 2022

9.Capital instruments (continued)

9.3 Sponsor warrants

On 6 December 2021, the Sponsor Entity entered into an agreement to purchase 10,850,000 sponsor

warrants at a price of $1.00 per sponsor warrant, the proceeds of which will be used as follows: (i)

$2,500,000 for the public offering commission cover; (ii) $3,350,000 for offering and running costs; and

(iii) $5,000,000 for the escrow overfunding.

Each of the sponsor warrants are exercisable 30 days after completion of the Business Combination.

Each sponsor warrant entitles the warrant holder to exercise a warrant into an ordinary share at a strike

price of $11.50. If the Company does not complete a Business Combination by the Business

Combination Deadline, the sponsor warrants will expire worthless.

The sponsor warrants are identical to the warrants underlying the units being sold in the Offering, except

that (i) the ordinary shares issuable upon the exercise of the sponsor warrants will not be transferable,

assignable, convertible or saleable until 30 days after the completion of a Business Combination, subject

to limited exceptions; (ii) the sponsor warrants may be exercised by the Sponsor Entity on either a cash

or cashless basis; (iii) a portion of the sponsor warrants may be redeemed upon completion of a Business

Combination as described in and subject to the order of payments being followed as set out in the

prospectus; and (iv) the sponsor warrants will not be admitted to listing or trading on any trading

platform.

9.4 Units

Units comprise of redeemable ordinary shares and public warrants. Each unit is exchangeable for one (1)

redeemable ordinary share and one-half (½) of a public warrant.

On 6 December 2021, the Sponsor Entity subscribed for 28,750,000 redeemable ordinary shares,

14,375,000 public warrants and 3,750,000 of the units for the over-allotment option (collectively the

“Subscription”) at their respective par values. The Subscription of the redeemable ordinary shares and

units was then redeemed by the Company for the same par values. The subscription of the public

warrants was, on the Settlement Date, redeemed by the Company for the same par values. After

completion of these transactions the Company held 28,750,000 redeemable ordinary shares and

14,375,000 public warrants in treasury to effect the redemption of units and 3,750,000 units were held in

treasury to effect the over-allotment option. Ultimately the over-allotment option was not exercised.

Brigade-M3 European Acquisition Corp.

Notes to the Interim Financial Statements (continued)

30 June 2022

9.Capital instruments (continued)

9.4 Units (continued)


Units		2022
In issue at 1 January		25,000,000
Converted during the period from 25 February to 25 June		(11,676,140)
In issue at 30 June		13,323,860

The units rank pari passu with each other and unit holders are entitled to dividends and other

distributions declared and paid on them. Each unit carries the distribution rights as included in the

articles of association and the right to attend and to cast one vote at a general meeting of the Company

(including at the Business Combination general meeting). However, units will not be redeemed in

connection with the Business Combination general meeting under the redemption arrangements. The

unit holders have the option to convert units into redeemable ordinary shares and public warrants from

the 37th calendar day after the Offering. Therefore, unit holders must first exchange their units for

redeemable ordinary shares in order to redeem such ordinary shares in connection with the Business

Combination general meeting under the redemption arrangements.


Units		2022 $
Proceeds from issuance of units		133,238,600
Offering costs		(359,716)
Contingent settlement provision		(3,823,320)
Interest expense calculated using the effective interest method		4,564,973
Net unrealised gain on public warrant liabilities, included in units		(4,463,493)
Carrying amount at 30 June		129,157,044
Carrying amount of component parts of units at 30 June:
Redeemable ordinary shares		128,157,755
Public warrants		999,289

Brigade-M3 European Acquisition Corp.

Notes to the Interim Financial Statements (continued)

30 June 2022

9.Capital instruments (continued)

9.4 Units (continued)

i.Redeemable ordinary shares attributable to units

The redeemable ordinary shares will rank pari passu with each other and holders of the redeemable

ordinary shares will be entitled to dividends and other distributions declared and paid on them. Each

redeemable ordinary share carries the distribution and liquidation rights as included in the articles of

association and the right to attend and to cast one vote at a general meeting of the Company (including

at the Business Combination general meeting).

The Company will provide ordinary shareholders with the opportunity to redeem all or a portion of their

ordinary shares upon the consummation of the Business Combination at a per-share price, payable in

cash, equal to the aggregate amount then on deposit in escrow calculated as of two trading days prior to

the consummation of the Business Combination, divided by the number of then issued and outstanding

ordinary shares (not held in treasury). As at 30 June 2022, the Company has issued 11,676,140

redeemable ordinary shares, with the remainder held in treasury.

ii.Public warrants attributable to units

Each whole public warrant entitles the warrant holder to purchase one ordinary share at a price of $11.50

per ordinary share at any time commencing on 30 days following the Business Combination completion

date. The public warrants will expire on the date that is five years following the date on which they first

became exercisable, or earlier upon redemption of the public warrants or liquidation of the Company. A

public warrant holder may exercise only whole public warrants at a given time. No fractional public

warrants will be issued or delivered upon exchange of the units and only whole public warrants will trade

on Euronext Amsterdam. Accordingly, unless an investor purchases at least two units, it will not be able

to receive or trade a whole public warrant. The public warrant holders in such capacity do not have the

rights of shareholders or any voting rights until they exercise their public warrants and receive ordinary

shares. After the issuance of ordinary shares upon exercise of the public warrants, such ordinary shares

will entitle the holder to the same rights as any other ordinary shareholder.

Once the public warrants become exercisable (and prior to their expiration), the Company has the ability

to redeem the outstanding public warrants in accordance with the terms and conditions as set out in the

prospectus. As at 30 June 2022, the Company has issues 5,838,070 public warrants, with the remainder

held in treasury.

Brigade-M3 European Acquisition Corp.

Notes to the Interim Financial Statements (continued)

30 June 2022

9.Capital instruments (continued)

9.4 Units (continued)

iii.Treasury

After the Offering, 28,750,000 redeemable ordinary shares, 14,375,000 public warrants and 3,750,000

units were held in treasury. On 22 December 2021, 3,750,000 of the total redeemable ordinary shares,

1,875,000 of the total public warrants and 3,750,000 of the total units, acquired by the Sponsor Entity

and held in treasury were surrendered for no consideration and cancelled.

The redeemable ordinary shares and public warrants held in treasury have been admitted to listing and

trading on Euronext Amsterdam, and held in treasury for the purpose of facilitating the exchange of

units into redeemable ordinary shares and public warrants. As long as redeemable ordinary shares are

held in treasury, they do not yield dividends, do not entitle the holder to voting rights, and do not count

towards the calculation of dividends or voting percentages. As long as any public warrants are held in

treasury, they will not be converted.


Financial instruments held in treasury as at	2021 22 December	2022 30 June
Redeemable ordinary shares	25,000,000	13,323,860
Public warrants	12,500,000	6,661,930

Brigade-M3 European Acquisition Corp.

Notes to the Interim Financial Statements (continued)

30 June 2022

10.Operating costs

As at 30 June 2022, total operating costs of the Company for the period ended 30 June 2022 amounted

to $1,388,513, which includes underwriting discount expense of $788,185 and insurance expense of

$305,000.

11.Dividends

No dividends were paid or declared by the Company during the period ended 30 June 2022.

12.Net loss per share

12.1.Basic net loss per share


		2022 $
Numerator
Net loss for the period used in basic earnings per share		(15,787,220)
Total net loss for the period used in basic earnings per share		(15,787,220)
Denominator
Weighted average number of sponsor shares used in basic loss per share		6,250,000
Total weighted average number of sponsor shares used in basic loss per share		6,250,000

The weighted average number of shares does not consider redeemable ordinary shares because these

instruments are not accounted for as equity, but rather as a financial liability.

12.2.Diluted net earnings per share

The Company has reviewed the dilution factors and concluded that there are no instruments that have

dilutive potential as at 30 June 2022. As there is uncertainty as to the likelihood of an initial Business

Combination, the potential dilutive effects of redeemable ordinary shares, sponsor warrants and public

warrants have not been factored into the above weighted average number of shares. The conditions for

conversion of these instruments to equity have not been satisfied at the reporting date. When the

Business Combination has occurred, the redeemable ordinary shares will become equity and will no

longer be a financial liability, hence the dilutive effect is not considered in the diluted earnings per share

calculation. As a result, diluted earnings per share is deemed to be the same as basic earnings per share as

at 30 June 2022 (see note 12.1).

Brigade-M3 European Acquisition Corp.

Notes to the Interim Financial Statements (continued)

30 June 2022

13.Contingent settlement provision

The underwriter has agreed to defer part of its underwriting commission, amounting to $11,250,000 or

4.5% of the aggregate gross proceeds of the Offering. This deferred underwriter commission will

become payable to the underwriter from the amounts held in escrow solely in the event that the

Company completes a Business Combination, subject to the terms of the underwriting agreement.

The Company has recognised a contingent settlement provision related to deferred underwriter

commission in these financial statements. This contingent settlement provision was initially recognised at

fair value as at the Settlement Date and subsequently recognised at amortised cost. The fair value at

initial recognition of the contingent settlement provision was determined by discounting the total

deferred commissions using management's estimate of the probability of Business Combination and the

adjusted risk free rate at the Settlement Date. Further, fair value of the contingent settlement provision is

estimated for the purposes of disclosure in note 16. Management's estimate of the probability of business

combination at Settlement Date for the purposes of initial recognition and as at the financial reporting

date for the purposes of disclosure in note 16, is an unobservable input that requires significant

judgment. Subsequent measurement of the contingent settlement provision at amortised cost is

determined by estimating the rate that exactly discounts the estimated future cash payments through the

expected life of the financial liability to the amortised cost of the financial liability. As of 30 June 2022,

management determined that it was probable that a business combination would occur (i.e. that there is a

greater than 50% probability that a business combination would occur). Accordingly, estimated future

cash payments are 100% of the amount required to be settled. Significant judgment has been applied in

the determination of the probability of business combination. The fair value of the contingent settlement

provision as at 30 June 2022 has been estimated at $5,584,928.

14.Related party transactions

All legal entities that can be controlled, jointly controlled or significantly influenced by the Company are

considered to be a related party. Also, entities which can control, jointly control or significantly influence

the Company are considered a related party. In addition, statutory and supervisory directors and close

relatives are regarded as related parties.

Share based payments between the Company and the Sponsor Entity have been recognised, as disclosed

in note 17.

The sponsor shares carry voting rights of 20% of total shares eligible to vote, of which the directors hold

0.3%.

Brigade-M3 European Acquisition Corp.

Notes to the Interim Financial Statements (continued)

30 June 2022

14.Related party transactions (continued)

The Company entered into a forward derivative agreement with Brigade-M3 European FPA L.P. (the

"Purchaser") on 6 December 2021. The terms of the agreement state that the Company shall issue and

sell to the Purchaser, and the Purchaser shall purchase from the Company, at the Company’s discretion,

up to 2,500,000 shares at an exercise price of $10 per ordinary share. The agreement may be terminated

any time prior to the forward agreement derivative's closing, either by mutual consent of the Company

and the Purchaser or it will automatically terminate if the Business Combination is not consummated

within 18 months. Total fair value of the forward agreement derivative as at 30 June 2022 was $12,250.

On 8 December 2021, the Company entered into an agreement with a related party, Brigade Capital UK

LLP, as Financial Advisor, pursuant to which the related party will assist the Company in identifying

suitable target companies. As consideration for services provided the Company will pay advisor fees of

$2,500,000, contingent on a successful Business Combination.

There were no other related party transactions for the period ending 30 June 2022.


30 June 2022	Number of shares, beginning of period	Issued	Transfers	Forfeited/ Dispossesse d	Number of shares, end of period
Sponsor shares
Brigade SPAC Sponsor II LLC	6,145,000	-	-	-	6,145,000
Vijay Rajguru (Executive director and chairman)	25,000	-	-	-	25,000
Rosalia Portela (Executive director)	20,000	-	-	-	20,000
Carlos Sagasta (Non-executive director)	20,000	-	-	-	20,000
Stephan Walz (Non-executive director)	20,000	-	-	-	20,000
Brenda Rennick (Non- executive director)	20,000	-	-	-	20,000
	6,250,000	-	-	-	6,250,000


30 June 2022	Number of warrants, beginning of period	Issued	Forfeited/ Dispossessed	Number of warrants, end of period
Sponsor warrants
Brigade SPAC Sponsor II LLC	10,850,000	-	-	10,850,000

Brigade-M3 European Acquisition Corp.

Notes to the Interim Financial Statements (continued)

30 June 2022

15.Income tax

The Company is domiciled in the Cayman Islands. Under the current laws of the Cayman Islands, there

is no income, estate, corporation, capital gains or other taxes payable by the Company. As a result, no

provision for Cayman Islands’ taxes has been made in the financial statements.

Overseas withholding taxes may be charged on certain investment income and capital gains of the

Company. No withholding taxes have been incurred or paid during the period ended 30 June 2022.

The Company has concluded that there was no impact on the results of its operations relating to

taxation for the period ended 30 June 2022.

16.Accounting classification and fair value

The following table shows the carrying amounts and fair values of financial assets and financial liabilities,

including their levels in the fair value hierarchy.


30 June 2022	Carrying Value	Fair Value	Fair value hierarchy level
Financial assets measured at fair value
Forward purchase agreement	12,250	12,250	Level 3
	12,250	12,250
Financial assets measured at amortised cost
Cash	522,380	522,380	Level 1
Cash held in escrow	255,162,939	255,162,939	Level 1
Share capital receivable	625	625	Level 2
	255,685,944	255,685,944
Financial liabilities measured at fair value
Public warrant liabilities	875,711	875,711	Level 3
Public warrant liabilities, included in units	999,289	999,289	Level 3
Sponsor warrant liabilities	1,826,055	1,826,055	Level 3
	3,701,055	3,701,055
Financial liabilities measured at amortised cost
Redeemable ordinary shares	112,308,887	113,842,365	Level 3
Redeemable ordinary shares, included in units	128,157,755	129,907,635	Level 3
Contingent settlement provision	7,173,822	5,584,928	Level 3
Accrued expenses	110,508	110,508	Level 2
	247,750,972	249,445,436

Brigade-M3 European Acquisition Corp.

Notes to the Interim Financial Statements (continued)

30 June 2022

17.Share based payment reserve

The Sponsor Entity has provided services in the form of expertise and guidance to assist the Company

in achieving the Business Combination, in exchange for sponsor shares

The Sponsor Entity acquired 7,187,500 sponsor shares at par value of $0.0001 which will convert to

ordinary shares on a basis of 20% of the total ordinary shares. 937,500 of the total sponsor shares

acquired by the Sponsor Entity were forfeited for no consideration on 22 December 2021 following the

decision not to exercise the over-allotment. In order for the sponsor shares to convert to ordinary

shares, a Business Combination would have to occur and market conditions, such as certain target share

prices in the promote schedule as per the prospectus need to be achieved.

As the Company will trade its own ordinary shares as consideration for services received, the share based

payment is treated as equity-settled. The vesting period is the 18 months over which the Company has to

complete a Business Combination. The grant date is considered to be the date of Offering. The value of

services received is determined by a valuation specialist with reference to the fair value of the sponsor

shares issued.

The valuation specialist has used a Monte Carlo simulation to estimate the fair value of the sponsor

shares. Non-market performance conditions have not been taken into account when estimating the fair

value such as the probability of Business Combination. The key inputs used in the measurement of the

fair values at grant date of the sponsor shares were the initial stock price, volatility, expected term and

the restriction period after the initial Business Combination.

As of grant date the fair value of each sponsor share was $8.44. The difference between the total

consideration received by the Company for the sponsor shares and their fair value at the Offering date

was $52,744,375. This will be pro-rated over the period to the Business Combination Deadline and

recognised in equity as a share based payment reserve. The associated expense for the Reporting Period

amounts to $17,436,953 which is reflected in the statement of comprehensive income as a share based

payment expense.

18.Subsequent events

The Company has evaluated the effect of all subsequent events occurring through 29 September 2022,

the date the financial statements were available to be issued, and has determined that there were no

subsequent events requiring adjustment to or disclosure in the financial statements.

Brigade-M3 European Acquisition Corp.

Notes to the Interim Financial Statements (continued)

30 June 2022


	Page(s)

Interim Directors’ Report	1 - 10
Unaudited Condensed Statement of Financial Position	11
Unaudited Condensed Statement of Comprehensive Income	12
Unaudited Condensed Statement of Changes in Shareholders' Deficit	13
Unaudited Condensed Statement of Cash Flows	14
Notes to the Unaudited Condensed Financial Statements	15 - 44