Quarterly Report (10-q)

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

false0001851612Q3--12-31The Warrants are accounted for as liabilities in accordance with Subtopic 815-40 and are presented within warrant liabilities on the unaudited condensed balance sheets. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities in the unaudited condensed statements of operations.Shares of Class A common stock and warrants comprising the units began separate trading on the Nasdaq under the symbols “BHAC” and “BHACW,” respectively on November 26, 2021. Consequently, Public Warrants have been re-classified from Level 3 to Level 1 to reflect those observable inputs for identical instruments in active markets now exists.With the decline in volatilities, there is de minimis benefit to private warrants with exemption from make whole redemptions. The private warrants were priced the same as public warrants. 0001851612 2022-09-30 0001851612 2021-12-31 0001851612 2022-07-01 2022-09-30 0001851612 2021-07-01 2021-09-30 0001851612 2022-01-01 2022-09-30 0001851612 2021-02-23 2021-09-30 0001851612 2021-02-23 2021-03-31 0001851612 2021-04-01 2021-06-30 0001851612 2022-01-01 2022-03-31 0001851612 2022-04-01 2022-06-30 0001851612 2021-02-22 0001851612 2021-03-31 0001851612 2021-06-30 0001851612 2021-09-30 0001851612 2022-03-31 0001851612 2022-06-30 0001851612 us-gaap:CommonClassBMember 2022-09-30 0001851612 us-gaap:CommonClassAMember 2022-09-30 0001851612 bhacu:PublicSharesMember 2022-09-30 0001851612 srt:MinimumMember 2022-09-30 0001851612 srt:MinimumMember bhacu:PostBusinessCombinationMember 2022-09-30 0001851612 bhacu:PublicWarrantsMember us-gaap:IPOMember 2022-09-30 0001851612 us-gaap:IPOMember 2022-09-30 0001851612 bhacu:UnderwritingAgreementMember 2022-09-30 0001851612 us-gaap:CommonClassBMember bhacu:FounderSharesMember 2022-09-30 0001851612 srt:MaximumMember 2022-09-30 0001851612 bhacu:FounderSharesMember 2022-09-30 0001851612 bhacu:SponsorMember bhacu:RelatedPartyLoansMember 2022-09-30 0001851612 bhacu:SponsorPromissoryNoteMember bhacu:SponsorMember 2022-09-30 0001851612 bhacu:AdministrationServicesAgreementMember bhacu:SponsorPromissoryNoteMember bhacu:SponsorMember 2022-09-30 0001851612 bhacu:PublicWarrantsMember 2022-09-30 0001851612 bhacu:PrivatePlacementWarrantsMember 2022-09-30 0001851612 bhacu:SharePriceEqualsOrExceedsTenUsdMember 2022-09-30 0001851612 bhacu:EventTriggeringAdjustmentToExercisePriceOfWarrantsMember bhacu:PublicWarrantsMember 2022-09-30 0001851612 bhacu:SharePriceEqualsOrExceedsTenUsdMember bhacu:EventTriggeringAdjustmentToExercisePriceOfWarrantsMember bhacu:PublicWarrantsMember 2022-09-30 0001851612 bhacu:PublicWarrantsMember bhacu:EventTriggeringAdjustmentToExercisePriceOfWarrantsMember bhacu:SharePriceEqualsOrExceedsEighteenUsdMember 2022-09-30 0001851612 bhacu:SharePriceEqualsOrExceedsTenUsdMember bhacu:PublicWarrantsMember srt:MinimumMember 2022-09-30 0001851612 bhacu:PublicWarrantsMember us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2022-09-30 0001851612 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember bhacu:PrivatePlacementWarrantsMember 2022-09-30 0001851612 us-gaap:MeasurementInputRiskFreeInterestRateMember bhacu:PrivatePlacementAndPublicWarrantsMember 2022-09-30 0001851612 us-gaap:MeasurementInputExpectedTermMember bhacu:PrivatePlacementAndPublicWarrantsMember 2022-09-30 0001851612 us-gaap:MeasurementInputPriceVolatilityMember bhacu:PrivatePlacementAndPublicWarrantsMember 2022-09-30 0001851612 us-gaap:MeasurementInputExercisePriceMember bhacu:PrivatePlacementAndPublicWarrantsMember 2022-09-30 0001851612 bhacu:WarrantLiabilitiesMember 2022-09-30 0001851612 bhacu:SponsorMember bhacu:WorkingCapitalLoanMember 2022-09-30 0001851612 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2022-09-30 0001851612 us-gaap:USTreasurySecuritiesMember us-gaap:FairValueInputsLevel2Member 2022-09-30 0001851612 us-gaap:CommonClassBMember 2021-12-31 0001851612 us-gaap:CommonClassAMember 2021-12-31 0001851612 bhacu:FounderSharesMember 2021-12-31 0001851612 bhacu:RelatedPartyLoansMember bhacu:SponsorMember 2021-12-31 0001851612 bhacu:SponsorMember bhacu:SponsorPromissoryNoteMember 2021-12-31 0001851612 bhacu:PublicWarrantsMember 2021-12-31 0001851612 bhacu:PrivatePlacementWarrantsMember 2021-12-31 0001851612 bhacu:PublicWarrantsMember us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2021-12-31 0001851612 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember bhacu:PrivatePlacementWarrantsMember 2021-12-31 0001851612 us-gaap:MeasurementInputRiskFreeInterestRateMember bhacu:PrivatePlacementAndPublicWarrantsMember 2021-12-31 0001851612 us-gaap:MeasurementInputPriceVolatilityMember bhacu:PrivatePlacementAndPublicWarrantsMember 2021-12-31 0001851612 us-gaap:MeasurementInputExercisePriceMember bhacu:PrivatePlacementAndPublicWarrantsMember 2021-12-31 0001851612 bhacu:PrivatePlacementAndPublicWarrantsMember us-gaap:MeasurementInputExpectedTermMember 2021-12-31 0001851612 bhacu:WarrantLiabilitiesMember 2021-12-31 0001851612 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2021-12-31 0001851612 us-gaap:USTreasurySecuritiesMember us-gaap:FairValueInputsLevel2Member 2021-12-31 0001851612 us-gaap:RetainedEarningsMember 2022-07-01 2022-09-30 0001851612 us-gaap:CommonClassAMember 2022-07-01 2022-09-30 0001851612 us-gaap:CommonClassBMember 2022-07-01 2022-09-30 0001851612 us-gaap:RetainedEarningsMember 2021-07-01 2021-09-30 0001851612 bhacu:AdministrationServicesAgreementMember bhacu:AffiliateOfTheSponsorMember 2021-07-01 2021-09-30 0001851612 us-gaap:CommonClassAMember 2021-07-01 2021-09-30 0001851612 us-gaap:CommonClassBMember 2021-07-01 2021-09-30 0001851612 bhacu:AdministrationServicesAgreementMember bhacu:AffiliateOfTheSponsorMember 2021-02-23 2021-09-30 0001851612 us-gaap:CommonClassAMember 2021-02-23 2021-09-30 0001851612 us-gaap:CommonClassBMember 2021-02-23 2021-09-30 0001851612 us-gaap:CommonStockMember us-gaap:CommonClassBMember 2021-02-23 2021-03-31 0001851612 us-gaap:AdditionalPaidInCapitalMember 2021-02-23 2021-03-31 0001851612 us-gaap:RetainedEarningsMember 2021-02-23 2021-03-31 0001851612 us-gaap:RetainedEarningsMember 2021-04-01 2021-06-30 0001851612 us-gaap:RetainedEarningsMember 2022-01-01 2022-03-31 0001851612 us-gaap:RetainedEarningsMember 2022-04-01 2022-06-30 0001851612 bhacu:AffiliateOfTheSponsorMember bhacu:AdministrationServicesAgreementMember 2022-04-01 2022-06-30 0001851612 srt:MinimumMember 2022-01-01 2022-09-30 0001851612 srt:MaximumMember 2022-01-01 2022-09-30 0001851612 us-gaap:CommonClassAMember us-gaap:IPOMember 2022-01-01 2022-09-30 0001851612 us-gaap:IPOMember 2022-01-01 2022-09-30 0001851612 bhacu:RegistrationRightsAgreementMember 2022-01-01 2022-09-30 0001851612 bhacu:UnderwritingAgreementMember 2022-01-01 2022-09-30 0001851612 us-gaap:MemberUnitsMember 2022-01-01 2022-09-30 0001851612 us-gaap:WarrantMember 2022-01-01 2022-09-30 0001851612 bhacu:ExtendedPeriodOneMember us-gaap:CommonClassBMember bhacu:FounderSharesMember 2022-01-01 2022-09-30 0001851612 bhacu:ExtendedPeriodTwoMember us-gaap:CommonClassBMember bhacu:FounderSharesMember 2022-01-01 2022-09-30 0001851612 bhacu:FounderSharesMember us-gaap:CommonClassBMember 2022-01-01 2022-09-30 0001851612 bhacu:FounderSharesMember 2022-01-01 2022-09-30 0001851612 bhacu:PrivatePlacementWarrantsMember 2022-01-01 2022-09-30 0001851612 bhacu:AdministrationServicesAgreementMember bhacu:AffiliateOfTheSponsorMember 2022-01-01 2022-09-30 0001851612 bhacu:PublicWarrantsMember 2022-01-01 2022-09-30 0001851612 bhacu:SharePriceEqualsOrExceedsTenUsdMember 2022-01-01 2022-09-30 0001851612 us-gaap:CommonClassAMember 2022-01-01 2022-09-30 0001851612 srt:MaximumMember bhacu:PublicWarrantsMember 2022-01-01 2022-09-30 0001851612 bhacu:WarrantLiabilitiesMember 2022-01-01 2022-09-30 0001851612 bhacu:EventTriggeringAdjustmentToExercisePriceOfWarrantsMember bhacu:PublicWarrantsMember 2022-01-01 2022-09-30 0001851612 us-gaap:CommonClassBMember 2022-01-01 2022-09-30 0001851612 us-gaap:CommonClassAMember us-gaap:IPOMember 2021-10-04 2021-10-04 0001851612 bhacu:PublicWarrantsMember us-gaap:IPOMember 2021-10-04 2021-10-04 0001851612 us-gaap:CommonClassAMember us-gaap:IPOMember 2021-10-04 0001851612 bhacu:FounderSharesMember bhacu:SponsorMember 2021-02-23 2021-12-31 0001851612 bhacu:PublicWarrantsMember 2021-02-23 2021-12-31 0001851612 bhacu:PrivatePlacementWarrantsMember 2021-02-23 2021-12-31 0001851612 us-gaap:IPOMember bhacu:FounderSharesMember 2021-10-06 2021-10-06 0001851612 bhacu:FounderSharesMember bhacu:SponsorMember 2021-10-06 2021-10-06 0001851612 bhacu:FounderSharesMember 2021-10-06 2021-10-06 0001851612 bhacu:FounderSharesMember bhacu:SponsorMember 2021-10-06 0001851612 bhacu:FounderSharesMember 2021-10-06 0001851612 bhacu:FounderSharesMember 2021-10-07 2021-10-07 0001851612 bhacu:PrivatePlacementWarrantsMember 2021-10-07 2021-10-07 0001851612 us-gaap:CommonClassBMember bhacu:FounderSharesMember 2021-10-07 0001851612 bhacu:FounderSharesMember 2021-10-07 0001851612 us-gaap:IPOMember us-gaap:CommonClassAMember 2021-10-07 0001851612 bhacu:SponsorPromissoryNoteMember bhacu:SponsorMember 2021-03-12 0001851612 bhacu:PrivatePlacementWarrantsMember 2021-10-07 2021-12-31 0001851612 bhacu:PublicWarrantsMember 2021-10-07 2021-12-31 0001851612 bhacu:WarrantLiabilitiesMember 2021-10-07 2021-12-31 0001851612 srt:MinimumMember 2022-09-30 2022-09-30 0001851612 bhacu:PublicWarrantsMember 2022-05-31 0001851612 us-gaap:CommonClassAMember bhacu:SharePriceEqualsOrExceedsEighteenUsdMember 2022-05-31 0001851612 bhacu:SharePriceEqualsOrExceedsTenUsdMember srt:MaximumMember bhacu:PublicWarrantsMember 2022-05-31 0001851612 us-gaap:CommonClassAMember 2022-11-14 0001851612 us-gaap:CommonClassBMember 2022-11-14 0001851612 us-gaap:PreferredStockMember 2022-09-30 0001851612 us-gaap:CommonStockMember us-gaap:CommonClassBMember 2022-09-30 0001851612 us-gaap:AdditionalPaidInCapitalMember 2022-09-30 0001851612 us-gaap:RetainedEarningsMember 2022-09-30 0001851612 us-gaap:PreferredStockMember 2021-09-30 0001851612 us-gaap:CommonStockMember us-gaap:CommonClassBMember 2021-09-30 0001851612 us-gaap:AdditionalPaidInCapitalMember 2021-09-30 0001851612 us-gaap:RetainedEarningsMember 2021-09-30 0001851612 us-gaap:PreferredStockMember 2021-02-22 0001851612 us-gaap:CommonClassBMember us-gaap:CommonStockMember 2021-02-22 0001851612 us-gaap:AdditionalPaidInCapitalMember 2021-02-22 0001851612 us-gaap:RetainedEarningsMember 2021-02-22 0001851612 us-gaap:PreferredStockMember 2021-03-31 0001851612 us-gaap:CommonStockMember us-gaap:CommonClassBMember 2021-03-31 0001851612 us-gaap:AdditionalPaidInCapitalMember 2021-03-31 0001851612 us-gaap:RetainedEarningsMember 2021-03-31 0001851612 us-gaap:PreferredStockMember 2021-06-30 0001851612 us-gaap:CommonStockMember us-gaap:CommonClassBMember 2021-06-30 0001851612 us-gaap:AdditionalPaidInCapitalMember 2021-06-30 0001851612 us-gaap:RetainedEarningsMember 2021-06-30 0001851612 us-gaap:PreferredStockMember 2021-12-31 0001851612 us-gaap:CommonStockMember us-gaap:CommonClassBMember 2021-12-31 0001851612 us-gaap:AdditionalPaidInCapitalMember 2021-12-31 0001851612 us-gaap:RetainedEarningsMember 2021-12-31 0001851612 us-gaap:PreferredStockMember 2022-03-31 0001851612 us-gaap:CommonStockMember us-gaap:CommonClassBMember 2022-03-31 0001851612 us-gaap:AdditionalPaidInCapitalMember 2022-03-31 0001851612 us-gaap:RetainedEarningsMember 2022-03-31 0001851612 us-gaap:PreferredStockMember 2022-06-30 0001851612 us-gaap:CommonStockMember us-gaap:CommonClassBMember 2022-06-30 0001851612 us-gaap:AdditionalPaidInCapitalMember 2022-06-30 0001851612 us-gaap:RetainedEarningsMember 2022-06-30 iso4217:USD xbrli:shares xbrli:pure utr:Month utr:Year utr:Day iso4217:USD xbrli:shares bhacu:Number utr:Y

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM

10-Q

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

For the quarterly period ended September 30, 2022

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

Crixus BH3 Acquisition Company

(Exact name of registrant as specified in its charter)


Delaware	001-40868	86-2249068
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification Number)


819 NE 2nd Avenue, Suite 500 Fort Lauderdale, Florida		33304
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (954)

416-3140

Not Applicable

(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class:	Trading Symbol:	Name of Each Exchange on Which Registered:
Units, each consisting of one share of Class A common stock and one-half of one Redeemable Warrant	BHACU	The Nasdaq Stock Market LLC
Class A common stock, par value $0.0001 per share	BHAC	The Nasdaq Stock Market LLC
Redeemable Warrants, each whole warrant exercisable for one share of Class A common stock at an exercise price of $11.50	BHACW	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation

S-T

(§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a

non-accelerated

filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule

12b-2

of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule

12b-2

of the Exchange Act). Yes ☒ No ☐

As of

November 14, 2022,

there were 23,000,000 shares of Class A common stock, par value $0.0001 per share, and 5,750,000 shares of Class B common stock, par value $0.0001 per share, issued and outstanding.

CRIXUS BH3 ACQUISITION COMPANY

Quarterly Report on Form

10-Q

Table of Contents


		Page No.
PART I. FINANCIAL INFORMATION			3

Item 1.	Financial Statements		3

	Condensed Balance Sheets as of September 30, 2022 (Unaudited) and December 31, 2021		3

	Condensed Statements of Operations for the three and nine months ended September 30, 2022, for the three months ended September 30, 2021, and for the period from February 23, 2021 (Date of Inception) to September 30, 2021 (Unaudited)		4

	Condensed Statements of Changes in Stockholders’ Deficit for the three and nine months ended September 30, 2022, for the three months ended September 30, 2021, and for the period from February 23, 2021 (Date of Inception) to September 30, 2021 (Unaudited)		5

	Condensed Statements of Cash Flows for the nine months ended September 30, 2022 and for the period from February 23, 2021 (Date of Inception) to September 30, 2021 (Unaudited)		6

	Notes to Condensed Financial Statements (Unaudited)		7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		22

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		26

Item 4.	Controls and Procedures		26

PART II. OTHER INFORMATION			27

Item 1.	Legal Proceedings		27

Item 1A.	Risk Factors		27

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		30

Item 3.	Defaults Upon Senior Securities		30

Item 4.	Mine Safety Disclosures		30

Item 5.	Other Information		30

Item 6.	Exhibits		31

SIGNATURES			32

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

CRIXUS BH3 ACQUISITION COMPANY

CONDENSED BALANCE SHEETS


	(Unaudited) September 30, 2022			December 31, 2021
ASSETS
Current assets
Cash	$	365,742		$	1,131,162
Prepaid Expenses		15,609			570,994

Total current assets		381,351			1,702,156
Securities held-to-maturity in Trust Account, at amortized cost		233,938,297			232,284,770

Total assets	$	234,319,648		$	233,986,926

LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accrued expenses	$	61,700		$	5,000
Derivative warrant liability		2,685,000			8,959,173

Total current liabilities		2,746,700			8,964,173
Deferred underwriting fee payable		8,050,000			8,050,000

Total liabilities		10,796,700			17,014,173
Commitments and contingencies (Note 7)
Temporary equity
Class A common stock, $0.0001 par value; 200,000,000 shares authorized; 23,000,000 shares issued and outstanding, subject to possible redemption		231,722,936			230,000,000
Stockholders’ deficit
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none outstanding		—			—
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 5,750,000 shares issued and outstanding at September 30, 2022 and December 31, 2021		575			575
Accumulated deficit		(8,200,563	)		(13,027,822	)

Total stockholders’ deficit		(8,199,988	)		(13,027,247	)

Total liabilities, temporary equity and stockholders’ deficit	$	234,319,648		$	233,986,926

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

Table of Contents

CRIXUS BH3 ACQUISITION COMPANY

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)


	Three months ended September 30,					Nine months ended September 30,		For the period from February 23, 2021 (inception) through September 30,
	2022			2021		2022		2021
Formation and operating costs	$	445,631		$	—	$	1,446,914	$	30,548

Loss from operations		445,631			—		1,446,914		30,548

Other income:
Interest income		1,411,236			—		1,722,936		—
Change in fair value of derivative warrant		352,629			—		6,274,173		—

Total other income		1,763,865			—		7,997,109		—

Net income (loss)	$	1,318,234		$	—	$	6,550,195	$	(30,548	)

Weighted average shares outstanding, Class A Common Stock subject to possible redemption		23,000,000			—		23,000,000		—

Basic and diluted net income per share, Class A Common Stock subject to possible redemption	$	0.06		$	—	$	0.24	$	—

Weighted average shares outstanding, Class B Common Stock		5,750,000			5,750,000		5,750,000		5,303,653

Basic and diluted net income (loss) per share, Class B Common Stock	$	(0.00	)	$	—	$	0.17	$	(0.01	)

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

Table of Contents

CRIXUS BH3 ACQUISITION COMPANY

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

(Unaudited)


	Preferred Stock				Class B Common Stock				Additional		Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Paid-In Capital		Deficit			Deficit
Balance as of February 23, 2021 (date of inception)		—	$	—		—	$	—	$	—	$	—		$	—
Issuance of Class B common stock to Sponsor		—		—		5,750,000		575		24,425		—			25,000
Net loss		—		—		—		—		—		(4,973	)		(4,973	)

Balance as of March 31, 2021		—		—		5,750,000		575		24,425		(4,973	)		20,027
Net loss		—		—		—		—		—		(25,575	)		(25,575	)

Balance as of June 30, 2021		—		—		5,750,000		575		24,425		(30,548	)		(5,548	)
Net loss		—		—		—		—		—		—			—

Balance as of September 30, 2021		—	$	—		5,750,000	$	575	$	24,425	$	(30,548	)	$	(5,548	)


	Preferred Stock				Class B Common Stock				Additional		Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Paid-In Capital		Deficit			Deficit
Balance as of December 31, 2021		—	$	—		5,750,000	$	575	$	—	$	(13,027,822	)	$	(13,027,247	)
Net income		—		—		—		—		—		355,796			355,796

Balance as of March 31, 2022		—		—		5,750,000		575		—		(12,672,026	)		(12,671,451	)
Net income		—		—		—		—		—		4,876,165			4,876,165

Balance as of June 30, 2022		—		—		5,750,000		575		—		(7,795,861	)		(7,795,286	)
Accretion of Class A common stock to redemption value		—		—		—		—		—		(1,722,936	)		(1,722,936	)
Net income		—		—		—		—		—		1,318,234			1,318,234

Balance as of September 30, 2022		—	$	—		5,750,000	$	575	$	—	$	(8,200,563	)	$	(8,199,988	)

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

Table of Contents

CRIXUS BH3 ACQUISITION COMPANY

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)


				For the period from
	For the nine months			February 23, 2021
	ended September 30,			(inception) through
	2022			September 30, 2021
Cash flows from operating activities
Net income (loss)	$	6,550,195		$	(30,548	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Interest earned on marketable securities held in Trust Account		(1,438,115	)		—
Change in fair market value of derivative warrant liability		(6,274,173	)		—
Changes in operating assets and liabilities:
Prepaid expenses		555,385			(16,000	)
Accrued expenses		56,700			6,825
Deferred offering costs		—			(129,120	)

Net cash used in operating activities		(550,008	)		(168,843	)

Cash flows from investing activities
Proceeds from Trust Account		69,409			—
Maturities of marketable securities in Trust Account		464,802,000			—
Purchases of marketable securities in Trust Account		(697,613,882	)		—
Sales of marketable securities in Trust Account		232,527,061			—

Net cash used in investing activities		(215,412	)		—

Cash flows from financing activities
Proceeds from notes payable to Sponsor		—			145,000
Proceeds from issuance of Class B common stock		—			25,000

Net cash provided by financing activities		—			170,000

Net change in cash		(765,420	)		1,157
Cash at beginning of period		1,131,162			—

Cash at end of period	$	365,742		$	1,157

Supplemental disclosure of non-cash investing and financing activities:
Deferred offering cost included in accrued expenses	$	—		$	200,000

Accretion of Class A common stock to redemption value	$	1,722,936		$	—

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

Table of Contents

CRIXUS BH3 ACQUISITION COMPANY

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

Note 1 - Organization and Plan of Business Operations

Crixus BH3 Acquisition Company (the “Company”) is a blank check company incorporated as a Delaware company on February 23, 2021. The Company was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (a “Business Combination”). The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).

Although the Company is not limited to a particular industry or geographic region for purposes of consummating a Business Combination, the Company intends to focus on targets within the real estate, construction and infrastructure industries. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.

The Company has not yet begun operations and therefore, all activity for the period from February 23, 2021 (date of inception) through September 30, 2022 relates to the Company’s Initial Public Offering and identifying a target for the Business Combination. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company will generate

non-operating

income or losses in the form of interest income from the proceeds derived from the Initial Public Offering and from changes in the fair value of the warrant derivative liability.

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants (as defined in Note 3), although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. The Company’s initial Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the Trust Account (excluding any deferred underwriting commissions and taxes payable on the income earned on the Trust Account) at the time of the signing an agreement to enter into a Business Combination. However, the Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. There is no assurance that the Company will be able to successfully effect a Business Combination.

The Company will provide the holders of Class A common stock, par value, $0.0001 per shares (“Class A common stock”, “Class A Shares” or “public shares”, and such holders, the “Public Stockholders”) with the opportunity to redeem all or a portion of their public shares upon the completion of the Business Combination, either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer, in either case at a

per-share

price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the Business Combination, including interest (which interest shall be net of taxes payable) divided by the number of then outstanding public shares. Notwithstanding the foregoing, if the Company seeks stockholder approval of the Business Combination and the Company does not conduct redemptions pursuant to the tender offer rules, a Public Stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the public shares. The Company will proceed with a Business Combination only if it has net tangible assets of at least $5,000,001 upon consummation of the Business Combination and, in the case of a stockholder vote, a majority of the outstanding Common Stock voted are voted in favor of the Business Combination.

The Nasdaq rules require that the Business Combination must be with one or more target businesses that together have an aggregate fair market value equal to at least 80% of the balance in the Trust Account (less any Deferred Commissions (as defined below) and taxes payable on interest earned) at the time of the Company signing a definitive agreement in connection with the Business Combination.

Table of Contents

The Company will have until April 7, 2023 (or until July 7, 2023 or October 7, 2023, as applicable, if the Company extends the period of time to consummate a Business Combination) (the “Combination Period”). If the Company has not completed a Business Combination within 18 months from the closing of the Initial Public Offering (or 21 months or 24 months, as applicable), the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a

per-share

price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable, and less up to $100,000 of interest to pay dissolution expenses) divided by the number of then outstanding public shares, which redemption will completely extinguish the rights of the Public Stockholders as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and its Board of Directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In the event of a liquidation, the Public Stockholders will be entitled to receive a full pro rata interest in the Trust Account (initially anticipated to be approximately $10.00 per share, plus any pro rata interest earned on the Trust Fund not previously released to the Company to pay its tax obligations and less up to $100,000 of interest to pay dissolution expenses). There will be no redemption rights or liquidating distributions with respect to the Founder Shares (as defined below) or the Private Placement Warrants, which will expire worthless if the Company fails to complete a Business Combination within the

18-month

(or

21-month

24-month,

as applicable) time period.

Liquidity

The Company has incurred and expects to continue to incur additional costs in pursuit of its acquisition plans. The Company has determined that it will not be able to sustain operations for the next twelve months without additional financing. These conditions raise a substantial doubt about the Company’s ability to continue as a going concern for the next twelve months from the issuance of these condensed consolidated financial statements. Based on the Company’s plan and ability to request working capital loans of up to $1.5 million from its sponsor (see Note 4), the Company believes that it has alleviated the substantial doubt about its ability to continue as a going concern, and it will have sufficient working capital and borrowing capacity to meet its needs through the earlier of the consummation of a Business Combination or one year from this filing. There is no assurance that the Company’s plan to raise capital or to consummate a Business Combination will be successful or successful within the Combination Period (as defined below). The unaudited condensed financial statements do not include any adjustments that might result from the Company’s inability to consummate the proposed Business Combination.

Note 2 - Significant Accounting Policies

Basis of Presentation

The Company’s unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) as determined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The condensed consolidated balance sheet at December 31, 2021 has been derived from the audited consolidated financial statements at that date, but does not include all disclosures, including notes, required by U.S. GAAP for complete financial statements.

The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form

10-K

for the period ended December 31, 2021, as filed with the SEC on March 25, 2022, which contains the audited financial statements and notes thereto. The interim results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or for any future interim periods.

Table of Contents

Emerging Growth Company

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act, and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Further, section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities and Exchange Act of 1934, as amended) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to

non-emerging

growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of commitments and contingencies at the date of the unaudited condensed financial statements as well as the reported amounts of expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited condensed financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.

Cash and Cash Equivalents

As of September 30, 2022 and December 31, 2021, the Company had approximately $0.4 million and $1.1 million, respectively, in cash outside of the trust account available for working capital needs. The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.

Securities

Held-to-Maturity

in Trust Account

The Company had $233.9 million and $232.3 million held within a trust account in cash and marketable securities as of September 30, 2022 and December 31, 2021, respectively, none of which was available for working capital needs. Substantially all of the assets held in the Trust Account are held in U.S. Treasury securities. The Company’s investments held in the Trust Account are classified as

held-to-maturity

securities.

Held-to-maturity

securities are stated at amortized cost, adjusted for amortization of premiums and accretion of discounts to maturity computed under the effective interest method, at the end of each subsequent reporting period. Interest earned on the investments during each reporting period is recorded at the end of each reporting period and is reported as interest income in the accompanying condensed statements of operations. The Company estimated the expected credit loss for each security in its portfolio using the

probability-of-default

method. The Company concluded there were no expected losses as of September 30, 2022 and December 31, 2021.

Table of Contents

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which at times, may exceed the Federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts.

Fair Value of Financial Instruments

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “

Fair Value Measurement” (“Topic 820”)

, approximates the carrying amounts represented in the accompanying unaudited condensed financial statements. Topic 820 establishes a fair value hierarchy that prioritizes and ranks the level of observability of inputs used to measure investments at fair value. The observability of inputs is impacted by a number of factors, including the type of characteristics specific to the financial instruments, market conditions and other factors. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

Financial instruments with readily available quoted prices or for which fair value can be measured from quoted prices in active markets will typically have a higher degree of input observability and a lesser degree of judgment applied in determining fair value. The three levels of the fair value hierarchy under Topic 820 are as follows:

Level 1—Unadjusted quoted prices in active markets for identical financial instruments at the measurement date are used.

Level 2—Pricing inputs are other than quoted prices included within Level 1 that are observable for the investment, either directly or indirectly. Level 2 pricing inputs include quoted prices for similar financial instruments in active markets, quoted prices for identical or similar financial instruments in markets that are not active, inputs other than quoted prices that are observable for the financial instruments and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3

—

Pricing inputs are unobservable and include situations where there is little, if any, market activity for the financial instruments. The inputs used in determination of fair value require significant judgment and estimation.

In some cases, the inputs used to measure fair value might fall within different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the financial instrument is categorized in its entirety is determined based on the lowest level input that is significant to the financial instrument.

The carrying amounts of working capital balances approximate their fair values due to the short maturity of these items.

Derivative Liabilities

The Company evaluated the Public Warrants and Private Placement Warrants (collectively, “Warrant Securities”) in accordance with ASC Subtopic

815-40,

“

Derivatives and Hedging—Contracts in Entity’s Own Equity

” (“

Subtopic

814-40

”), and concluded that the Warrant Securities could not be accounted for as components of equity. As the Warrant Securities meet the definition of a derivative in accordance with Subtopic

815-40,

the Warrant Securities are recorded as derivative liabilities on the unaudited condensed balance sheets and measured at fair value at inception (the Close Date) and remeasured at each reporting date in accordance with Topic 820, with changes in fair value recognized in the unaudited condensed statement of operations in the period of change.

Offering Costs

The Company complies with the requirements of the ASC paragraph

340-10-S99-1

and SEC Staff Accounting Bulletin (“SAB”) Topic

5A-Expenses

of Offering. Offering costs consist principally of professional and registration fees incurred through the unaudited condensed balance sheet date that are related to the Initial Public Offering (the “IPO”). Offering costs are charged against the carrying value of Class A common stock or the unaudited condensed statement of operations based on the relative value of the Class A common stock and the Public Warrants to the proceeds received from the Units sold upon the completion of the IPO.

Table of Contents

Class A Common Stock Subject to Possible Redemption

The Company accounts for its Class A common stock subject to possible redemption in accordance with the guidance in ASC Topic 480 “

Distinguishing Liabilities from Equity

” (“

Topic 480

”). Shares of Class A common stock subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. Shares of conditionally redeemable Class A common stock (including Class A common stock that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, shares of Class A common stock are classified as stockholders’ equity. The Company’s Class A common stock features include certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, at September 30, 2022 and December 31, 2021, 23,000,000 shares of Class A common stock subject to possible redemption are presented as temporary equity, outside of the stockholders’ equity section of the accompanying unaudited condensed balance sheets.

All of the 23,000,000 shares of Class A common stock sold as part of the Units in the Initial Public Offering contain a redemption feature which allows for the redemption of such public shares in connection with the Company’s liquidation if there is a stockholder vote or tender offer in connection with the Business Combination and in connection with certain amendments to the Company’s second amended and restated certificate of incorporation. In accordance with SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC paragraph

480-10-S99,

redemption provisions not solely within the control of the Company require common stock subject to redemption to be classified outside of permanent equity. Ordinary liquidation events, which involve the redemption and liquidation of all of the entity’s equity instruments, are excluded from the provisions of Topic 480. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stock to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock are affected by charges against additional

paid-in

capital and accumulated deficit. During the three months and nine months ended September 30, 2022, the Company recorded accretion on Class A common stock of $1.4 million and $1.7 million to redemption value related to the interest in the trust account, respectively.

Income Taxes

The Company accounts for income taxes under ASC Topic 740,

Income Taxes

(“

Topic740

”). Topic 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statements and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. A valuation allowance is established when it is more likely than not that all or a portion of a deferred tax asset will not be realized.

Topic 740 prescribes a recognition threshold and a measurement attribute for financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be

more-likely-than-not

to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense. There were

unrecognized tax benefits and

amounts accrued for interest and penalties as of September 30, 2022 and December 31, 2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.

The provision for income taxes was deemed to be immaterial for both, the periods from inception to September 30, 2021, as well as the period from January 1, 2022 through September 30, 2022.

Recent Accounting Standards

Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements.

Table of Contents

Net Income (Loss) Per Share of Common Stock

The Company has two classes of shares outstanding, which are referred to as Class A common stock and Class B common stock. Income and losses are shared pro rata between the two classes of common stock. Basic net income (loss) per share of common stock is calculated by dividing the net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, without consideration of potentially dilutive securities. Diluted net income (loss) per share is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common stock and potentially dilutive securities outstanding for the period. For the purposes of the diluted net income (loss) per share calculation the warrants to purchase common stock are considered to be potentially dilutive securities pursuant to the treasury stock method. In order to determine the net income (loss) attributable to both the Class A common stock and Class B common stock, the Company first considered the total income (loss) allocable to both sets of shares. This is calculated using the total net income (loss) less any dividends paid. For purposes of calculating net income (loss) per share, any changes to the redemption value of the Class A common stock is treated as a deemed dividend for the purposes of the numerator in the earnings per share calculation, as the redemption value approximates fair value. Subsequent to calculating the total income (loss) allocable to both sets of shares, the Company calculates the amount to be allocated pro rata between Class A common stock and Class B common stock for each of the periods presented.

The following table reflects the calculation of basic and diluted net income (loss) per share of common stock (in dollars, except per share amounts):


	For the three months ended September 30, 2022						For the three months ended September 30, 2021				For the nine months ended September 30, 2022						For the period from February 23, 2021 (date of inception) to September 30, 2021
	Class A			Class B			Class A		Class B		Class A			Class B			Class A		Class B
Basic and diluted net income (loss) per share:
Numerator:
Allocation of net income (loss)		1,054,587			263,647			—		—		5,240,156			1,310,039			—		(30,548	)
Less: Accretion allocated based on ownership percentage		(1,128,989	)		(282,247	)		—		—		(1,378,349	)		(344,587	)		—		—
Plus: Accretion applicable to Class A redeemable shares		1,411,236			—			—		—		1,722,936			—			—		—

Income (loss) by class	$	1,336,834		$	(18,600	)	$	—	$	—	$	5,584,743		$	965,452		$	—	$	(30,548	)

Denominator:
Weighted average common stock outstanding, basic and diluted		23,000,000			5,750,000			—		5,750,000		23,000,000			5,750,000			—		5,303,653

Basic and diluted net income (loss) per common share		0.06			(0.00	)		—		—		0.24			0.17			—		(0.01	)

As of September 30, 2022, warrants to purchase 17,900,000 shares of Class A common stock were excluded from the computation of diluted net income (loss) per share of common stock for the periods presented as the exercise price is greater than the average market price (out of the money) and their inclusion would be anti-dilutive under the treasury stock method. As a result, basic and diluted income (loss) per share is the same for the periods presented.

Note 3 - Initial Public Offering

The registration statement for the Initial Public Offering was declared effective on October 4, 2021. On October 4, 2021, the Company consummated the Initial Public Offering by selling 23,000,000 units at a purchase price of $10.00 (“Units”), generating gross proceeds of $230.0 million. Each Unit consists of one Class A Share and

one-half

Public Warrant. Each whole warrant (“Public Warrant”) entitles the holder to purchase one Class A Share at a price of $11.50 per share.

Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 6,400,000 warrants (the “Private Placement Warrants”) at a price of $1.50 per warrant in a private placement to Crixus BH3 Sponsor LLC (the “Sponsor”), generating gross proceeds of $9.6 million, which is described in Note 4.

Following the closing of the Initial Public Offering, an amount of $232.3 million ($10.10 per Unit) from the net proceeds of the sale of the units in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account (“Trust Account”) which may be invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule

2a-7

of the Investment Company Act, as determined by the Company, until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution of the Trust Account, as described below.

Table of Contents

Transaction costs from the Initial Public Offering amounted to $22.4 million, consisting of $12.7 million of underwriters’ fees and discounts, $9.3 million for the excess fair value of founder shares attributable to the anchor investors (see Note 4), and $0.5 million of other offering costs, net of third-party vendor credits. Such transaction costs were allocated to Class A common stock and warrants issued in the Initial Public Offering based on their relative fair values. Accordingly, $1.4 million of the $22.4 million in total transaction costs (which includes $0.6 million of the excess fair value of the Founder Shares sold to anchor

investors-see

Note 4), were allocated to the public warrants.

Note 4 - Related Party Transactions

Founder Shares

Prior to the Initial Public Offering, our Sponsor and directors (the “Initial Stockholders”) purchased an aggregate of 5,750,000 shares of Class B common stock, par value $0.0001 per share (“Class B common stock,” Class B Shares” or “founder shares”) for an aggregate purchase price of $25,000, or approximately $0.004 per share. Prior to the initial investment in the Company of $25,000 by our initial stockholders, the Company had no assets, tangible or intangible. The per share purchase price of the founder shares was determined by dividing the amount of cash contributed to the Company by the aggregate number of founder shares issued. Our initial stockholders (including our anchor investors) collectively owned 20% of the outstanding shares of common stock following the Initial Public Offering. Up to 750,000 founder shares were subject to forfeiture by the Sponsor depending on the extent to which the underwriters’ over-allotment option was exercised. The underwriters exercised their over-allotment option in full on October 6, 2021; thus, the 750,000 founder shares are no longer subject to forfeiture. Certified qualified institutional buyers or institutional accredited investors, as defined in Rule 144A and Regulation D, respectively, under the Securities Act, which are not affiliated with us, our sponsor, our directors or any member of our management and that purchased an aggregate of approximately 22,980,000 units in our initial public offering at the public offering price (“herein referred to as “anchor investor”) purchased the number of units for which it had provided an indication of interest (not to exceed 9.9% of the units sold in the Initial Public Offering). In consideration of these purchases, the Sponsor entered into an investment agreement with each of the anchor investors pursuant to which the Sponsor sold 1,450,758 founder shares in the aggregate, at their original purchase price of approximately $0.004 per share.

The founder shares are identical to the shares of our Class A common stock included in the units sold in the offering, except that:

•

prior to our initial business combination, only holders of the founder shares have the right to vote on the election of directors and holders of a majority of the founder shares may remove a member of the board of directors for any reason;

•

the founder shares are subject to certain transfer restrictions, as described in more detail below;

Table of Contents

•

each of our Sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive (i) their redemption rights with respect to their founder shares and any public shares held by them in connection with the completion of our initial business combination; (ii) their redemption rights with respect to their founder shares and any public shares held by them in connection with a stockholder vote to approve an amendment to our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we have not completed an initial business combination within 18 months from the closing of the Initial Public Offering (or 21 months or 24 months, as applicable, from the closing of the Initial Public Offering if we were to extend the period of time to consummate our initial business combination) or (B) with respect to any other provisions relating to stockholders’ rights or

pre-initial

business combination activity; and (iii) their rights to liquidating distributions from the trust account with respect to any founder shares held by them if we do not complete our initial business combination within 18 months from the closing of the Initial Public Offering (or 21 months or 24 months, as applicable), although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we do not complete our initial business combination within the prescribed time frame. If we submit our initial business combination to our public stockholders for a vote, our Sponsor, officers and directors have agreed to vote their founder shares and any public shares they may acquire during or after the Initial Public Offering, in favor of our initial business combination, and each of the anchor investors has agreed to vote its founder shares (subject to the right to abstain from voting) in favor of our initial business combination.

•

the founder shares are shares of Class B common stock that will automatically convert into shares of our Class A common stock on the first business day following the completion of our initial business combination;

•

the anchor investors will not be entitled to (i) redemption rights with respect to any founder shares held by them in connection with the completion of our initial business combination; (ii) redemption rights with respect to any founder shares held by them in connection with a stockholder vote to amend our amended and restated certification of incorporation in a manner that would affect the substance or timing of our obligation to redeem 100% of our public shares if we have not consummated an initial business combination within 18 months from the closing of the Initial Public Offering (or 21 months or 24 months, as applicable) or; (iii) rights to liquidating distributions from the trust account with respect to any founder shares held by them if we fail to complete our initial business combination within 18 months from the closing of the offering (or 21 months or 24 months, as applicable) (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our business combination within the prescribed time frame); and

•

the founder shares are entitled to registration rights.

Transfer restrictions on founder shares

Holders of the Company’s founder shares (including the anchor investors) have agreed not to transfer, assign or sell any of their founder shares and any shares of our Class A common stock issuable upon conversion thereof until the earlier to occur of: (i) one year after the completion of our initial business combination; and (ii) subsequent to our initial business combination, (x) if the last reported sale price of our Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any

30-trading

day period commencing at least 150 days after our initial business combination, or (y) the date on which we complete a liquidation, merger, capital stock exchange or other similar transaction that results in all of our public stockholders having the right to exchange their shares of common stock for cash, securities or other property (except to certain permitted transferees and under certain limited circumstances). Any permitted transferees will be subject to the same restrictions and other agreements of our initial stockholders with respect to any founder shares (except that the anchor investors will be permitted to abstain from voting founder shares).

In conjunction with each anchor investor purchasing 100% of the Units allocated to it, in connection with the closing of the Initial Public Offering, the Sponsor sold an aggregate of 1,450,758 Founder Shares at their original purchase price. The Company estimated the fair value of the Founder Shares attributable to the anchor investors to be $9.3 million or $6.40 per share as of October 7, 2021 (date of the Initial Public Offering).

Table of Contents

The excess of the fair value of the Founder Shares sold over the purchase price of $5,803 (or $.004 per 1,450,758 share) was determined to be an issuance cost of the Initial Public Offering incurred on the Company’s behalf. Accordingly, this issuance cost as well as Offering Costs were accounted for as an equity contribution from the Sponsor. As a portion of the Initial Public Offering consisted of Warrant Securities that are accounted for as liabilities, as such the fair value of the 1,450,758 Founder Shares sold to the anchor investors by the Sponsor ($0.6 million) was allocated to the warrant liability as of October 7, 2021 (date of Public Offering).

Private Placement Warrants

Simultaneously with the Initial Public Offering, the Sponsor purchased an aggregate of 6,400,000 Private Placement Warrants at $1.50 per Private Placement Warrant, for an aggregate purchase price of $9,600,000. Each Private Placement Warrant is exercisable to purchase one share of Class A common stock at an exercise price of $11.50 (subject to adjustment in certain circumstances). The proceeds from the Private Placement Warrants, net of $4.6 million in underwriting discounts, $0.8 million in Offering Costs, and $2.0 million designated for operational use were added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds of the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless. There will be no redemption rights or liquidating distributions from the Trust Account with respect to the Private Placement Warrants.

The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants: (i) will not be redeemable by the Company so long as they are held by the Sponsor or any of its permitted transferees; (ii) may be exercised for cash or on a cashless basis, so long as they are held by the Sponsor or any of its permitted transferees and (iii) are (including the common stock issuable upon exercise of the Private Placement Warrants) entitled to registration rights. Additionally, the Sponsor has agreed not to transfer, assign or sell any of the Private Placement Warrants, including the Class A Shares issuable upon exercise of the Private Placement Warrants (except to certain permitted transferees), until 30 days after the completion of the Business Combination.

Indemnity

The Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a vendor for services rendered or products sold to the Company, or a prospective target business with which the Company discussed entering into a transaction agreement, reduces the amount of funds in the Trust Account to below (i) $10.00 per public share or (ii) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company has not independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and believes that the Sponsor’s only assets are securities of the Company and, therefore, the Sponsor may not be able to satisfy those obligations. The Company has not asked the Sponsor to reserve for such eventuality as the Company believes the likelihood of the Sponsor having to indemnify the Trust Account is limited because the Company will endeavor to have all vendors and prospective target businesses as well as other entities execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

Table of Contents

Related Party Loans

In order to finance transaction costs in connection with the Business Combination, the Sponsor has executed an unsecured promissory note and agreed to loan the Company up to $1.5 million as may be required, the terms of which consist of no interest accrual and a maturity date commensurate with the date Business Combination has been consummated (“Working Capital Loans”). In the event that the Business Combination does not close, the Company may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from the trust account would be used for such repayment. Up to $1.5 million of such loans may be convertible into warrants at a price of $1.50 per warrant at the option of the lender. The warrants would be identical to the private placement warrants issued to the Sponsor. There are no related party loans outstanding as of September 30, 2022 and December 31, 2021.

Note Payable to Sponsor

On March 12, 2021, the Sponsor and the Company executed an unsecured promissory note pursuant to which the Company had the ability to borrow up to $0.3 million in the aggregate to cover expenses in connection with the Initial Public Offering (the “Promissory Note”). The Promissory Note was

non-interest

bearing and payable on the earlier of December 31, 2021 or the completion of the Initial Public Offering. The Company borrowed $0.1 million under the Promissory Note and the full amount was repaid on October 7, 2021. No subsequent draws were made against the Promissory Note following repayment on October 7, 2021 and there is no outstanding balance as of September 30, 2022 and December 31, 2021.

Administrative Services Agreement

The Company entered into an agreement whereby, commencing on October 7, 2021, through the earlier of the consummation of a Business Combination or the Company’s liquidation, the Company has agreed to pay an affiliate of the Sponsor a monthly fee of $15,000 for office space, utilities and administrative support. The Company records the administrative services agreement costs within formation and operating costs on the unaudited condensed statements of operations. For the three and nine months ended September 30, 2022, the Company incurred and paid $45,000 and $135,000, respectively. For the three months ended September 30, 2021 and for the period from February 23, 2021 (date of inception) to September 30, 2021, the Company did not incur any administrative services.

Note 5 - Stockholders’ Deficit

Preferred Stock

The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001. The Company’s board of directors is authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. The board of directors may, without stockholder approval, issue preferred stock with voting and other rights that could adversely affect the voting power and other rights of the holders of the Common Stock and could have anti-takeover effects. At September 30, 2022 and December 31, 2021, there were no shares of preferred stock issued or outstanding.

Common Stock

The Company is authorized to issue 200,000,000 Class A Shares, with a par value of $0.0001 each, and 20,000,000 Class B common stock, with a par value of $0.0001 each (the “Class B Shares” and, together with the Class A Shares, the “Common Stock”). Holders of the Common Stock are entitled to one vote for each share of Common Stock; provided that only holders of the Class B Shares have the right to vote on the election of directors prior to the Business Combination. The Class B Shares will automatically convert into Class A Shares at the time of the Business Combination, on a

one-for-one

basis, subject to adjustment for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like, and subject to further adjustment as provided herein.

In the case that additional Class A Shares, or equity-linked securities, are issued or deemed issued in excess of the amounts sold in the Initial Public Offering and related to the closing of the Business Combination, the ratio at which the Class B Shares shall convert into Class A Shares will be adjusted (unless the holders of a majority of the outstanding Class B common stock agree to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance) so that the number of Class A Shares issuable upon conversion of all Class B Shares will equal, in the aggregate, 20% of the sum of all Common Stock outstanding upon completion of the Initial Public Offering plus all Class A Shares and equity-linked securities issued or deemed issued in connection with the Business Combination, excluding any Common Stock or equity-linked securities issued, or to be issued, to any seller in the Business Combination, or any Private Placement-equivalent Warrants issued to the Sponsor or its affiliates upon conversion of loans made to the Company.

Table of Contents

At September 30, 2022 and December 31, 2021, there were 23,000,000 Class A Shares issued and outstanding, of which 3,482,975 Units and 8,759,346 Units, respectively, remain intact (each consisting of 1 share of Class A common stock and 1/2 of a public warrant). At September 30, 2022 and December 31, 2021, there were 5,750,000 Class B Shares issued and outstanding.

Warrants

Public Warrants may only be exercised for a whole number of shares. No fractional warrants will be issued upon separation of the Units and only whole warrants will trade. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination or (b) 12 months from the closing of the Initial Public Offering, provided in each case that the Company has an effective registration statement under the Securities Act covering the sale of the shares of its Class A common stock issuable upon exercise of the warrants, and a current Offering prospectus relating thereto is available, and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder (or the Company permits holders to exercise their warrants on a cashless basis under the circumstances specified in the warrant agreement as a result of (i) the Company’s failure to have an effective registration statement by the 60th business day after the closing of the Business Combination as described in the immediately following paragraph or (ii) a notice of redemption described below). The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation. At September 30, 2022 and December 31, 2021, there were 11,500,000 whole Public Warrants and 6,400,000 Private Placement Warrants outstanding.

The Company is not obligated to deliver any Class A common stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the shares of Class A common stock underlying the warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration. No warrant will be exercisable and the Company will not be obligated to issue any Class A common stock upon exercise of a warrant unless Class A common stock issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants.

The Company has agreed that as soon as practicable, but in no event later than 20 business days after the closing of a Business Combination, the Company will use its commercially reasonable efforts to file with the SEC and have an effective registration statement covering the sale of the shares of Class A common stock issuable upon exercise of the Warrants, and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the Warrants expire or are redeemed, as specified in the warrant agreement. If a registration statement covering the sale of the shares of Class A common stock issuable upon exercise of the Warrants is not effective by the 60th business day after the closing of the Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if the shares of Class A common stock at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, but will be required to use its commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.

Redemption of Warrant Securities when the price per share of Class A common stock equals or exceeds $18.00

Once the Warrant Securities become exercisable, the Company may redeem the outstanding Warrant Securities (except as described herein with respect to the Private Placement Warrants):

•

in whole and not in part;

Table of Contents

•

at a price of $0.01 per Warrant Security;

•

upon a minimum of 30 days’ prior written notice of redemption (the

“30-day

redemption period”); and

•

if, and only if, the last reported sale price of our Class A common stock for any 20 trading days within a

30-trading

day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the Warrant Securities’ holders (the “Reference Value”) equals or exceeds $18.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like and certain issuances of Class A common stock and equity-linked securities).

The Company will not redeem the Warrant Securities as described above unless an effective registration statement under the Securities Act covering the sale of the shares of Class A common stock issuable upon exercise of the Warrant Securities is effective, and a current prospectus relating thereto is available, throughout the

30-day

redemption period. Any such exercise would not be on a “cashless basis” and would require the exercising Warrant Security holder to pay the exercise price for each Warrant Security being exercised.

Except as set forth below, none of the Private Placement Warrants will be redeemable by the Company so long as they are held by the Sponsor or its permitted transferees.

Redemption of Warrant Securities when the price per share of Class A common stock equals or exceeds $ 10.00

Once the Warrant Securities become exercisable, the Company may also redeem the outstanding Warrant Securities (except as described herein with respect to the Private Placement Warrants):

•

in whole and not in part;

•

at $0.10 per Warrant Security upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to an agreed table based on the redemption date and the “fair market value” of the Class A common stock;

•

if, and only if, the Reference Value equals or exceeds $10.00 per share (as adjusted for stock splits, stock dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like and certain issuances of Class A common stock and equity-linked securities); and

•

if the Reference Value is less than $18.00 per share (as adjusted for stock splits, stock dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like and certain issuances of Class A common stock and equity- linked securities), the Private Placement Warrants must also concurrently be called for redemption on the same terms as the outstanding Public Warrants, as described above.

The “fair market value” of the Class A common stock means the volume-weighted average price of the Class A common stock for the ten trading days immediately following the date on which the notice of redemption is sent to the holders of Warrant Securities. The Company will provide its Warrant Security holders with the final fair market value no later than one business day after the

10-day

trading period described above ends. In no event will the Warrant Securities be exercisable in connection with this redemption feature for more than 0.361 shares of our Class A common stock per Warrant Security (subject to adjustment).

If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of shares of Class A common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.

Table of Contents

In addition, if (i) we issue additional common stock or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at a Newly Issued Price of less than $9.20 per common stock, (ii) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the completion of our initial business combination (net of redemptions), and (iii) the Market Value is below $9.20 per share, then the exercise price of the warrants will be adjusted to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $10.00 and $18.00 per share redemption trigger prices will be

adjusted (

to the nearest cent) to be equal to 100% and 180% of the higher of the Market Value and the Newly Issued Price, respectively.

Note 6 - Fair Value Measurement

The Company follows the guidance in Topic 820 for its financial assets and liabilities that are remeasured and reported at fair value at each reporting period. The following table presents information about the Company’s assets and derivative liabilities that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value.


	Level		September 30, 2022		December 31, 2021
Assets:
Cash		1	$	365,742	$	1,131,162
Liabilities:
Public Warrants (1,2)		1	$	1,725,000	$	5,744,250
Private Placement Warrants (1)		3	$	960,000	$	3,214,923

(1)

The Warrants are accounted for as liabilities in accordance with Subtopic

815-40

and are presented within warrant liabilities on the unaudited condensed balance sheets. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities in the unaudited condensed statements of operations.

(2)

Shares of Class A common stock and warrants comprising the units began separate trading on the Nasdaq under the symbols “BHAC” and “BHACW,” respectively on November 26, 2021. Consequently, Public Warrants have been

re-classified

from Level 3 to Level 1 to reflect those observable inputs for identical instruments in active markets now exists.

The Company established the initial fair value for the Warrants on October 7, 2021, the date of the Company’s Initial Public Offering, using a Black- Scholes Option Pricing Method (“BSM”) for the Private Placement Warrants and the Public Warrants. The Company allocated the proceeds received from (i) the sale of Units (which is inclusive of one share of Class A common stock and

one-half

of one Public Warrant), and (ii) the sale of Private Placement Units, first to the Warrants based on their fair values as determined at initial measurement, with the remaining proceeds allocated to shares of Class A common stock subject to possible redemption based on their relative fair values at the initial measurement date. Both the Private Placement Warrants and Public Warrants were classified as Level 3 at the initial measurement date due to the use of unobservable inputs. As of September 30, 2022 and December 31, 2022, the Public Warrants are classified as Level 1 in the fair value hierarchy and a BSM was not required.

The Company’s use of a Black-Scholes model (“BSM”) required the use of subjective assumptions:

•

The Risk-free rate as of the Valuation Date was selected based upon a typical equity investor assumed holding period.

•

The expected volatility assumption was based on the implied volatility from a set of comparable publicly-traded warrants as determined based on the size and proximity of other similar business combinations. An increase in the expected volatility, in isolation, would result in an increase in the fair value measurement of the warrant liabilities and vice versa.

Table of Contents

•

Based on the applied volatility assumption and the expected term to a business combination noted above, the Company determined that the risk neutral probability of exceeding the $18.00 redemption value by the start of the exercise period for the Warrants resulted in a nominal difference in value between the Public Warrants and Private Placement Warrants across the valuation dates utilized in the BSM.

The key inputs into the BSM for determining the fair value of the Private Placement Warrants include:


Input	Input Values as of September 30, 2022 [1]			Input Values as of December 31, 2021
Risk-free interest rate		N/A	%		1.26	%
Expected term (years)		N/A			5 Years
Expected volatility		N/A	%		10.0	%
Instrument exercise price for one share of Class A common stock	$	N/A		$	11.50

[1]	With the decline in volatilities, there is de minimis benefit to private warrants with exemption from make whole redemptions. The private warrants were priced the same as public warrants.

At September 30, 2022, the fair value was determined to be $0.15 per warrant for each of the Private Placement Warrants and Public Warrants, which corresponded with aggregate values of $1.0 million and $1.7 million, respectively. At December 31, 2021, the fair value was determined to be $0.50 per warrant for each of the Private Placement Warrants and Public Warrants, which corresponded with aggregate values of $3.2 million and $5.7 million, respectively. The use of a lowered expected volatility input as of September 30, 2022 was a significant contributor that led to the decrease in the fair value of the Private Placement Warrants and Public Warrants at September 30, 2022 as compared to December 31, 2021.

The following table presents the changes in the fair value of warrant liabilities:


	Private Placement			Public Warrants			Warrant Liabilities
Initial measurement on October 7, 2021	$	8,640,000		$	14,720,000		$	23,360,000
Change in fair value		(5,425,077	)		(8,975,750	)		(14,400,827	)

Fair value as of December 31, 2021		3,214,923			5,744,250			8,959,173
Change in fair value		(2,254,923	)		(4,019,250	)		(6,274,173	)

Fair value as of September 30, 2022	$	960,000		$	1,725,000		$	2,685,000

The following tables summarize the Company’s

held-to-maturity

investments, which are stated at amortized cost at September 30, 2022 and December 31, 2021:


September 30, 2022
Held-to-maturity securities, at amortized cost:	Amortized cost basis		Gross unrecognized holding gains		Gross unrecognized holding losses			Fair value (level 2)
U.S. Treasury securities	$	233,938,297	$	—	$	(236,741	)	$	233,701,556


December 31, 2021
Held-to-maturity securities, at amortized cost:	Amortized cost basis		Gross unrecognized holding gains		Gross unrecognized holding losses		Fair value (level 2)
U.S. Treasuries securities	$	232,284,770	$	—	$	—	$	232,284,770

As of September 30, 2022, all

held-to-maturity

securities are due within one year or less.

Table of Contents

Note 7 - Commitments

Registration Rights

Pursuant to a registration and stockholder rights agreement dated October 4, 2021, the holders of the Founder Shares, Private Placement Warrants (and their underlying securities) and the warrants that may be issued upon conversion of the Working Capital Loans (and their underlying securities) are entitled to registration rights. The holders of a majority of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable

lock-up

period. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

Underwriters Agreement

The underwriters were paid a cash underwriting discount of 2.0% of the gross proceeds of the Initial Public Offering, or $4.6 million. In addition, the underwriters are entitled to a deferred underwriting discount of 3.5% of the gross proceeds of the Initial Public Offering, or $8.1 million. The deferred commission was placed in the Trust Account and will be paid in cash upon the closing of a Business Combination, subject to the terms of the underwriting agreement.

Note 8 - Subsequent Events

Management of the Company evaluates events that have occurred after the unaudited condensed balance sheet date of September 30, 2022 through the date these unaudited condensed financial statements were issued. Based upon the review, management did not identify any recognized or

non-recognized

subsequent events that would have required adjustment or disclosure in the unaudited condensed financial statements.

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

References to the “Company,” “us,” “our” or “we” refer Crixus BH3 Acquisition Company. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited financial statements and related notes included herein.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Such statements include, but are not limited to, possible business combinations and the financing thereof, and related matters, as well as all other statements other than statements of historical fact included in this Form 10-Q. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other Securities and Exchange Commission (“SEC”) filings.

Overview

We are a newly organized blank check company incorporated on February 23, 2021 as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. We were initially incorporated under the name BH3 Acquisition Corp. and subsequently changed our name to Crixus BH3 Acquisition Company on July 21, 2021. We intend to effectuate our initial business combination using cash from the proceeds of the public offering and the private placements warrants, our capital stock, debt or a combination of cash, stock and debt.

Our units began trading on October 5, 2021 on the Nasdaq Global Market (the “Nasdaq”) under the symbol “BHACU.” Commencing on November 26, 2021, the shares of Class A common stock and warrants comprising the units began separate trading on the Nasdaq under the symbols “BHAC” and “BHACW,” respectively. Those units not separated continue to trade on the Nasdaq under the symbol “BHACU.”

Transaction costs of the initial public offering amounted to $22,407,388, consisting of $12,650,000 of underwriters’ fees and discounts, $9,276,147 for the excess fair value of founder shares attributable to the anchor investors, and $481,242 of other offering costs. In addition, the underwriters agreed to defer $8,050,000 in underwriting discounts and commissions.

Our management has broad discretion with respect to the specific application of the net proceeds of the initial public offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a business combination.

If we are unable to consummate an initial business combination within 18 months from the closing of the initial public offering (or 21 months or 24 months, as applicable), we will, as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including any interest earned on the funds held in the trust account, less up to $100,000 of interest to pay dissolution expenses and net of interest that may be used by us to pay our franchise and income taxes payable, divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law and as further described herein, and then seek to dissolve and liquidate. We expect the pro rata redemption price to be approximately $10.20 per share of common stock if we extend the period of time to consummate a business combination once, and approximately $10.30 per share of common stock if we extend the period of time to consummate a business combination twice, without taking into account any interest earned on such funds. However, we cannot assure you that we will in fact be able to distribute such amounts as a result of claims of creditors which may take priority over the claims of our public stockholders.

Results of Operations

Our only activities from inception through September 30, 2022 were organizational activities, those necessary to prepare for our Initial Public Offering, described below, and after our Initial Public Offering, identifying a target company for a Business Combination. We will not generate any operating revenues until the closing and completion of our initial Business Combination, at the earliest. We generate non-operating income in the form of interest income on marketable securities held after the Initial Public Offering and the change in fair value of warrant liabilities. We are incurring expenses as a result of being a public company for legal, financial reporting, accounting and auditing compliance, as well as for due diligence expenses in connection with searching for a Business Combination.

For the three months ended September 30, 2022, we had net income of $.1 million, which consists of interest income of $.2 million and income from the change in fair value of warrant liability of $0.4 million, offset by general and administrative expense of $0.4 million.

For the nine months ended September 30, 2022, we had net income of $5.4 million, which consists of interest income of $.5 million and income from the change in fair value of warrant liability of $6.3 million, offset by general and administrative expense of $1.4 million.

For the three months ended September 30, 2021, we had no income or loss.

For the period from February 23, 2021 (date of inception) through September 30, 2021, we had net loss of $30,548, which consisted of general and administrative expenses.

Our management continues to evaluate the impact of the COVID-19 pandemic and the Russia-Ukraine war and has concluded that the specific impact is not readily determinable as of the date of the unaudited condensed financial statements. The unaudited condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Liquidity and Capital Resources

Sources of Liquidity

Our liquidity needs from the period of February 23, 2021 (date of inception) through October 7, 2021 (date of the initial public offering) had been satisfied through the cash receipt of $25,000 from our initial stockholders to purchase the Founder Shares, and a loan of $300,000 pursuant to a note issued to our Sponsor (the “Note”). The Note was non-interest bearing and payable on the earlier of December 31, 2021 or the completion of the Initial Public Offering. We borrowed $145,000 under the Promissory Note and the full amount was repaid on October 7, 2021. Subsequent to the consummation of the initial public offering, our liquidity needs have been satisfied with the net proceeds from the consummation of the Private Placement not held in the Trust Account. In addition, in order to finance transaction costs in connection with a business combination, our Sponsor or its affiliates may, but are not obligated to, provide us working capital loans (“Working Capital Loans”). The Working Capital Loans would either be repaid upon consummation of a Business Combination or, at the lender’s discretion, up to $1.5 million of such Working Capital Loans may be convertible into warrants of the post Business Combination entity at a price of $1.50 per warrant. The warrants would be identical to the Private Placement Warrants. To date, there are no amounts outstanding under any Working Capital Loans.

As of September 30, 2022, we had approximately $0.4 million in cash outside of the trust account available for working capital needs and $233.7 million of cash and liquid marketable securities held in trust, which is not available for working capital needs.

The Sponsor, officers and directors, or any of their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable Business Combinations. Our audit committee will review on a quarterly basis all payments that were made to the Sponsor, officers or directors, or their affiliates.

We have incurred and expect to continue to incur additional costs in pursuit of our acquisition plans. We have determined that we will not be able to sustain operations for the next twelve months without obtaining additional financing. These conditions raise a substantial doubt about our ability to continue as a going concern for the next twelve months from the issuance of these condensed consolidated financial statements. Based on our plan to request Working Capital Loans of up to $1.5 million from our Sponsor, our management believes that we have alleviated the substantial doubt about our ability to continue as a going concern, and we will have sufficient working capital and borrowing capacity to meet our needs through the earlier of the consummation of a Business Combination or one year from this filing. Over this time period, we will be using these funds for paying existing accounts payable, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination.

Founder Shares

In March 2021, our initial stockholders purchased 5,750,000 shares of our Class B common stock, par value $0.0001 per share (the “Founder Shares”), for an aggregate price of $25,000 (1,450,758 of which were subsequently sold to our anchor investors at cost). Our Sponsor agreed to forfeit up to 750,000 Founder Shares to the extent that the over-allotment option was not exercised in full by the underwriters. The underwriters exercised their over-allotment option in full on October 7, 2021. As a result, these shares were no longer subject to forfeiture.

Holders of our Founder Shares (including the anchor investors) have agreed not to transfer, assign or sell any of their founder shares and any shares of our Class A common stock issuable upon conversion thereof until the earlier to occur of: (i) one year after the completion of our initial business combination; and (ii) subsequent to our initial business combination, (x) if the last reported sale price of our Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date on which we complete a liquidation, merger, capital stock exchange or other similar transaction that results in all of our public stockholders having the right to exchange their shares of common stock for cash, securities or other property (except to certain permitted transferees). Any permitted transferees will be subject to the same restrictions and other agreements of our initial stockholders with respect to any founder shares (except that our anchor investors will be permitted to abstain from voting founder shares).

Private Placement Warrants

Simultaneously with the closing of the initial public offering, on October 7, 2021, we consummated the Private Placement of 6,400,000 Private Placement Warrants in the aggregate at a price of $1.50 per Private Placement Warrant to our Sponsor, generating proceeds of $9,600,000.

Each whole Private Placement Warrant is exercisable for one share of Class A common stock at a price of $11.50 per share. A portion of the proceeds from the sale of the Private Placement Warrants to our Sponsor was added to the proceeds from the initial public offering held in the Trust Account. If we do not complete a Business Combination by April 7, 2023 (or by July 7, 2023 or October 7, 2023, as applicable, if we extend the period of time to consummate a Business Combination), the Private Placement Warrants will expire worthless. The Private Placement Warrants will be non-redeemable for cash and exercisable on a cashless basis so long as they are held by our Sponsor or permitted transferees.

The Sponsor and our officers and directors agreed, subject to limited exceptions, not to transfer, assign or sell any of their Private Placement Warrants until 30 days after the completion of the initial Business Combination.

Contractual Obligations

At September 30, 2022, we did not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay an affiliate of the Sponsor a monthly fee of $15,000 for office space, utilities and administrative support. For the three and nine months ended September 30, 2022, we incurred and paid $45,000 and $135,000, respectively. For the three months ended September 30, 2021 and for the period from February 23, 2021 (date of inception) to September 30, 2021, we did not incur any administrative services.

The underwriters were entitled to an underwriting discount of $0.20 per Unit, or $4,600,000 in the aggregate, paid upon the closing of the Initial Public Offering and Over-Allotment. In addition, the underwriters will be entitled to a deferred fee of $0.35 per Unit, or $8,050,000 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that we complete a Business Combination, subject to the terms of the underwriting agreement.

Registration Rights

The holders of the founder shares, private placement warrants and warrants that may be issued upon conversion of working capital loans (and any Class A common stock issuable upon the exercise of the private placement warrants and warrants that may be issued upon conversion of working capital loans) will be entitled to registration rights pursuant to a registration rights agreement to be signed prior to or on the effective date of the initial public offering. The holders of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our completion of our initial business combination.

However, the registration rights agreement provides that we will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lockup period, which occurs (i) in the case of the founder shares, as described in the following paragraph, and (ii) in the case of the private placement warrants and the respective shares of our Class A common stock underlying such warrants, 30 days after the completion of our initial business combination. We will bear the expenses incurred in connection with the filing of any such registration statements.

Except as described in this Quarterly Report, the holders of the founder shares (including the anchor investors) have agreed not to transfer, assign or sell any of their founder shares until the earlier to occur of (a) one year after the completion of our initial business combination, or (b) subsequent to our initial business combination, (x) if the last reported sale price of our Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date on which we complete a liquidation, merger, capital stock exchange or other similar transaction that results in all of our public stockholders having the right to exchange their shares of common stock for cash, securities or other property. Any permitted transferees will be subject to the same restrictions and other agreements of our sponsor with respect to any founder shares.

In addition, pursuant to the registration rights agreement, our sponsor, upon completion of an initial business combination, will be entitled to nominate up to three individuals for election to our board of directors, as long as the sponsor holds any securities covered by the registration rights agreement.

Off-Balance Sheet Financing Arrangements

As of September 30, 2022, we did not have any off-balance sheet arrangements.

Critical Accounting Policies and Estimates

The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. On an ongoing basis, we evaluate our estimates and assumptions. Actual results could materially differ from those

estimates under different assumptions or conditions. We consider an accounting judgment, estimate or assumption to be critical when (1) the estimate or assumption is complex in nature or requires a high degree of judgment and (2) the use of different judgments, estimates and assumptions could have a material impact on the financial statements. Our significant accounting policies are described in Note 2 to our unaudited condensed financial statements included elsewhere in this Report. Our critical accounting policies and estimates were described in Part II, Item 7, Critical Accounting Policies in our Annual Report. There have been no material changes to our critical accounting policies and estimates since our Annual Report. Accordingly, these are the policies and estimates we believe are the most critical to aid in fully understanding and evaluating our financial condition and results of operations:

•

The estimates used in the determination of the fair value of the warrant liability

•

The recognition, measurement and valuation of marketable debt securities held in our Trust Account

•

The recognition and measurement of Class A Common Stock subject to possible redemption

•

The computation of net income (loss) per share of common stock

Recent Accounting Pronouncements

Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on our unaudited condensed financial statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.

Item 4. Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Co-Chief Executive Officers, to allow timely decisions regarding required disclosure. As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Co-Chief Executive Officers and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2022. Based upon their evaluation, our Co-Chief Executive Officers and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective.

We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

Factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 25, 2022 (the “Annual Report”), and in our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022, filed with the SEC on May 12, 2022 (the “2022 Q1 Report”). Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. As of the date of this Quarterly Report, there have been no material changes to the risk factors disclosed in our Annual Report and the 2022 Q1 Report, except for the below.

The SEC has recently issued proposed rules to regulate special purpose acquisition companies. Certain of the procedures that we, a potential business combination target, or others may determine to undertake in connection with such proposals may increase our costs and the time needed to complete our initial business combination and may constrain the circumstances under which we could complete an initial business combination.

On March 30, 2022, the SEC issued proposed rules (the “SPAC Rule Proposals”) relating, among other items, to disclosures in business combination transactions between special purpose acquisition companies (“SPACs”) such as us and private operating companies; the condensed financial statement requirements applicable to transactions involving shell companies; the use of projections by SPACs in SEC filings in connection with proposed business combination transactions; the potential liability of certain participants in proposed business combination transactions; and the extent to which SPACs could become subject to regulation under the Investment Company Act of 1940, as amended, including a proposed rule that would provide SPACs a safe harbor from treatment as an investment company if they satisfy certain conditions that limit a SPAC’s duration, asset composition, business purpose and activities. Certain of the procedures that we, a potential business combination target, or others may determine to undertake in connection with the SPAC Rule Proposals, or pursuant to the SEC’s views expressed in the SPAC Rule Proposals, may increase the costs of negotiating and completing an initial business combination and the time required to consummate a transaction, and may constrain the circumstances under which we could complete an initial business combination.

If we were deemed to be an investment company for purposes of the Investment Company Act, we may be forced to abandon our efforts to complete an initial business combination and instead be required to liquidate. To avoid that result, on or shortly prior to the 24-month anniversary of the effective date of the IPO Registration Statement, or at such earlier time as may be required by law or regulation, or that we determine in our discretion is advisable to avoid such a result, we will liquidate the securities held in the Trust Account and instead hold all funds in the Trust Account in cash. As a result, following such liquidation, we will likely receive minimal interest, if any, on the funds held in the Trust Account, which would reduce the dollar amount that our public stockholders would receive upon any redemption or liquidation of the Company.

On March 30, 2022, the SEC issued the SPAC Rule Proposals relating, among other matters, to the circumstances in which SPACs such as us could potentially be deemed to be an “investment company” under, and consequently subject to registration under, the Investment Company Act of 1940, as amended (the “Investment Company Act”) and the regulations thereunder. The SPAC Rule Proposals would provide a safe harbor for such companies from the definition of “investment company” under Section 3(a)(1)(A) of the Investment Company Act, provided that a SPAC satisfies

certain criteria. To comply with the duration limitation of the proposed safe harbor, a SPAC would have a limited time period to announce and complete a de-SPAC transaction. Specifically, to comply with the safe harbor, the SPAC Rule Proposals would require a company to file a report on Form 8-K announcing that it has entered into an agreement with a target company for an initial business combination no later than 18 months after the effective date of its registration statement for its initial public offering (the “IPO Registration Statement”). The company would then be required to complete its initial business combination no later than 24 months after the effective date of the IPO Registration Statement.

There is currently uncertainty concerning the applicability of the Investment Company Act to a SPAC, including a company like ours. If we were deemed to be an investment company for purposes of the Investment Company Act, we might be forced to abandon our efforts to complete an initial business combination and instead be required to liquidate the Company. If we are required to liquidate, our investors would not be able to realize the benefits of owning stock in a successor operating business, including the potential appreciation in the value of our common stock and warrants following such a transaction, and our warrants would expire worthless. The funds in the Trust Account have, since our IPO, been held only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds investing solely in U.S. government treasury obligations and meeting certain conditions under Rule 2a-7 under the Investment Company Act. However, to mitigate the risk of us being deemed to have been operating as an unregistered investment company (including under the subjective test of Section (a)(1)(A) of the Investment Company Act of 1940, as amended), we will, on or prior to the 24-month anniversary of the effective date of IPO Registration Statement (or at such earlier time as discussed below), instruct Continental Stock Transfer & Trust Company, the trustee with respect to the Trust Account, to liquidate the U.S. government treasury obligations and money market funds (in each case, to the extent they exist) held in the Trust Account and thereafter to hold all funds in the Trust Account in cash until the earlier of consummation of our initial business combination or liquidation. As a result, following such liquidation, we will likely receive minimal interest, if any, on the funds held in the Trust Account, which would reduce the dollar amount our public stockholders would receive upon any redemption or liquidation of the Company.

In addition, even prior to the 24-month anniversary of the effective date of our IPO Registration Statement, we may be deemed to be an investment company under the Investment Company Act. The longer that the funds in the Trust Account are held in short-term U.S. government treasury obligations or in money market funds invested exclusively in such securities, even prior to the 24-month anniversary, there is a greater risk that we may be considered an unregistered investment company, in which case we may be required to liquidate the Company or such securities holdings. Accordingly, we may determine, in our discretion, to liquidate the securities held in the Trust Account at any time, even prior to the 24-month anniversary, and instead hold all funds in the Trust Account in cash, which would further reduce the dollar amount our public stockholders would receive upon any redemption or liquidation of the Company.

A new 1% U.S. federal excise tax could be imposed on us in connection with future redemptions by us of our shares.

On August 16, 2022, the Inflation Reduction Act of 2022 (the “IRA”) was signed into federal law which provides for, among other things, a 1% excise tax on the fair market value of stock repurchased by a U.S. corporation beginning in 2023, subject to certain exceptions. The excise tax is imposed on the repurchasing corporation itself, not its stockholders from which shares are repurchased. The U.S. Department of the Treasury has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax. It is unclear at this time how and to what extent it will apply to SPAC redemptions and liquidations, but since we are a publicly listed Delaware corporation, we are a “covered corporation” within the meaning of the IRA. Consequently, our Board believes that, absent additional guidance and unless an exception is available, there is a significant risk that this excise tax will apply to any redemptions of our public shares after December 31, 2022, including redemptions made if we are unable to consummate an initial business combination by or before April 7, 2023 (or by July 7, 2023 or October 7, 2023, as applicable) as provided in the charter. The application of the excise tax to any redemptions we make after December 31, 2022 could potentially reduce the per-share amount that our public stockholders would otherwise be entitled to receive upon redemption of their public shares.

We may not be able to complete an initial business combination with certain potential target companies if a proposed transaction with the target company may be subject to review or approval by regulatory authorities pursuant to certain U.S. or foreign laws or regulations.

Certain acquisitions or business combinations may be subject to review or approval by regulatory authorities pursuant to certain U.S. or foreign laws or regulations. In the event that such regulatory approval or clearance is not obtained, or the review process is extended beyond the period of time that would permit an initial business combination to be consummated with us, we may not be able to consummate an initial business combination with such target.

Among other things, the U.S. Federal Communications Act prohibits foreign individuals, governments, and corporations from owning more than a specified percentage of the capital stock of a broadcast, common carrier, or aeronautical radio station licensee. In addition, U.S. law currently restricts foreign ownership of U.S. airlines. In the United States, certain mergers that may affect competition may require certain filings and review by the Department of Justice and the Federal Trade Commission, and investments or acquisitions that may affect national security are subject to review by the Committee on Foreign Investment in the United States (“CFIUS”). CFIUS is an interagency committee authorized to review certain transactions involving foreign investment in the United States by foreign persons in order to determine the effect of such transactions on the national security of the United States.

Outside the United States, laws or regulations may affect our ability to consummate an initial business combination with potential target companies incorporated or having business operations in jurisdiction where national security considerations, involvement in regulated industries (including telecommunications), or in businesses relating to a country’s culture or heritage may be implicated.

U.S. and foreign regulators generally have the power to deny the ability of the parties to consummate a transaction or to condition approval of a transaction on specified terms and conditions, which may not be acceptable to us or a target. In such event, we may not be able to consummate a transaction with that potential target. As a result of these various restrictions, the pool of potential targets with which we could complete an initial business combination may be limited and we may be adversely affected in terms of competing with other SPACs which do not have similar ownership issues. Moreover, the process of government review, could be lengthy. Because we have only a limited time to complete our initial business combination, our failure to obtain any required approvals within the requisite time period may require us to liquidate. If we liquidate, our public stockholders may only receive $10.10 per share, and our warrants will expire worthless. This will also cause you to lose any potential investment opportunity in a target company and the chance of realizing future gains on your investment through any price appreciation in the combined company.

We may be deemed a “foreign person” under the regulations relating to CFIUS and our failure to obtain any required approvals within the requisite time period may require us to liquidate.

We do not believe that either we or our sponsor constitute a “foreign person” under CFIUS rules and regulations. However, if CFIUS considers us to be a “foreign person” and believes that the business of an initial business combination target may affect national security, we could be subject to foreign ownership restrictions and/or CFIUS review. If a potential business combination falls within the scope of applicable foreign ownership restrictions, we may be unable to consummate an initial business combination. In addition, if a potential initial business combination falls within CFIUS’s jurisdiction, we may be required to make a mandatory filing or determine to submit a voluntary notice to CFIUS, or to proceed with an initial business combination without notifying CFIUS and risk CFIUS intervention, before or after closing the initial business combination.

Although we do not believe we or the sponsor are a “foreign person”, CFIUS may take a different view and decide to block or delay a potential initial business combination, impose conditions to mitigate national security concerns with respect to a potential initial business combination, order us to divest all or a portion of a U.S. business of the potential combined company if we had proceeded without first obtaining CFIUS clearance, or impose penalties if CFIUS believes that the mandatory notification requirement applied. Additionally, the laws and regulations of other U.S. government entities may impose review or approval procedures on account of any potential foreign ownership by the sponsor. As a result, the pool of potential targets with which we could complete an initial business combination may be limited due to such regulatory restrictions. Moreover, the process of any government review, whether by CFIUS or otherwise, could be lengthy. Because we have only a limited time to complete an initial business combination, our

failure to obtain any required approvals within the requisite time period may require us to liquidate. If we liquidate, our public stockholders may only receive $10.10 per share (or up to $10.30 per share, assuming no redemption and the full existing extensions are utilized), and our warrants will expire worthless. This will also cause you to lose any potential investment opportunity in a potential initial business combination and the chance of realizing future gains on your investment through any price appreciation in the combined company.

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

Not Applicable.

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.


Exhibit Number		Description

31.1*		Certification of Co-Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002.

31.2*		Certification of Co-Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002.

31.3*		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002.

32.1**		Certification of Co-Chief Executive Officers (Co-Principal Executive Officers) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.

32.2**		Certification of Chief Financial Officer (Principal Financial and Accounting Officer) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.

101.INS*		Inline XBRL Instance Document

101.SCH*		Inline XBRL Taxonomy Extension Schema Document

101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104*		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*	Filed herewith.

These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on this 14th day of November, 2022.


CRIXUS BH3 ACQUISITION COMPANY

By:		/s/ Daniel Lebensohn
Name:		Daniel Lebensohn
Title:		Co-Chief Executive Officer (Co-Principal Executive Officer)

By:		/s/ Gregory Freedman
Name:		Gregory Freedman
Title:		Co-Chief Executive Officer and Chief Financial Officer (Co-Principal Executive Officer and Principal Financial and Accounting Officer)