Part I [Business](index=5&type=section&id=Item%201.%20Business) Bowlero Corp. is the world's largest operator of bowling entertainment centers, focusing on organic growth, strategic acquisitions, and leveraging its diverse brands and PBA ownership - Bowlero is the world's largest owner and operator of bowling centers, approximately **six times larger** than the next largest U.S. operator[13](index=13&type=chunk)[22](index=22&type=chunk) - The company operates under distinct brands: Bowlero (upscale entertainment concept) and AMF (traditional bowling in an updated format)[17](index=17&type=chunk) - A key growth strategy involves center acquisitions, including Bowl America Incorporated in August 2021, which operated **17 centers**[20](index=20&type=chunk) - The company owns and operates the Professional Bowlers Association (PBA), a strategic asset providing media content and a global fan base[18](index=18&type=chunk) Employee Count | Category | Count | | :--- | :--- | | **Total Employees** | **~9,390** | | Full-time | 2,965 | | Part-time | 6,422 | | Unionized Employees | 71 | - On December 15, 2021, the company completed a business combination with Isos Acquisition Corporation, leading to its public listing as "Bowlero Corp."[40](index=40&type=chunk) [Risk Factors](index=10&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant business, operational, IT, and ownership risks, including pandemic impacts, consumer spending volatility, competition, substantial debt, and concentrated voting power - The COVID-19 pandemic had a material adverse effect, causing government-mandated shutdowns and significant losses of **$29.9 million in FY2022** and **$126.5 million in FY2021**, alongside increased debt[44](index=44&type=chunk)[45](index=45&type=chunk)[46](index=46&type=chunk) - The business is highly dependent on discretionary consumer spending, susceptible to economic slowdowns, recessions, and changing consumer preferences[51](index=51&type=chunk) - The company faces substantial competition from other out-of-home entertainment and sophisticated home-based entertainment options[56](index=56&type=chunk) - A significant portion of operating expenses stems from long-term, non-cancelable leases, creating financial obligations even for unprofitable or closed centers[63](index=63&type=chunk) - The company has substantial indebtedness, with forecasted debt service of **$53.2 million in fiscal year 2023**, potentially limiting liquidity and operational flexibility[68](index=68&type=chunk) - Material weaknesses were identified in internal controls over financial reporting, specifically concerning acquisition accounting, fixed assets, financial reporting disclosures, and IT system access controls[139](index=139&type=chunk)[142](index=142&type=chunk) - The dual-class stock structure concentrates over **80% of voting power** with the founder and CEO, Thomas F. Shannon, and major investor Atairos, limiting public stockholder influence[179](index=179&type=chunk)[180](index=180&type=chunk)[184](index=184&type=chunk) - The company is a "controlled company" under NYSE rules, qualifying for exemptions from certain corporate governance requirements, such as having a majority of independent directors[190](index=190&type=chunk)[191](index=191&type=chunk) [Unresolved Staff Comments](index=33&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments - None[193](index=193&type=chunk) [Properties](index=34&type=section&id=Item%202.%20Properties) As of July 3, 2022, the company operates **317 bowling centers** globally, primarily leased, with the majority located in the United States Bowling Center Portfolio by Location | Location | Leased | Owned | Total | | :--- | :--- | :--- | :--- | | United States | 278 | 32 | 310 | | Mexico | 2 | 3 | 5 | | Canada | 2 | 0 | 2 | | **Total** | **282** | **35** | **317** | - The company's U.S. operations are geographically diverse, with the largest presence in **California (44 locations)**, **Virginia (29 locations)**, and **Florida (28 locations)**[196](index=196&type=chunk) - As of July 3, 2022, the company has **three centers in development** and **four closed centers** in its real estate portfolio[196](index=196&type=chunk) [Legal Proceedings](index=35&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various legal proceedings, notably facing approximately **76 pending EEOC claims** primarily alleging age discrimination, which management believes will not materially affect its financial condition - Approximately **76 pending claims** have been filed with the EEOC between 2016 and 2019, generally relating to age discrimination[199](index=199&type=chunk) - The EEOC determined probable cause for an alleged pattern or practice of age discrimination on March 7, 2022, proposing conciliation with monetary and non-monetary remedies on August 22, 2022[199](index=199&type=chunk) - Management, after consulting legal counsel, believes the EEOC claims do not pose a material business risk, noting many would be time-barred if brought by individuals directly[199](index=199&type=chunk) [Mine Safety Disclosures](index=35&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company - Not applicable[200](index=200&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=36&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Bowlero's Class A common stock is listed on the NYSE, with the company repurchasing over **3.3 million shares** under a **$200 million program** while retaining earnings for growth and paying 5.5% dividends on preferred stock - On February 7, 2022, the Board authorized a share and warrant repurchase program of up to **$200 million** through February 3, 2024[205](index=205&type=chunk) Share Repurchase Program Activity | Fiscal Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | May 2, 2022 to May 29, 2022 | 503,720 | $9.31 | | May 30, 2022 to July 3, 2022 | 2,817,193 | $10.24 | | **Total for Q4 FY22** | **3,320,913** | **$10.10** | - The company has no current plans to pay cash dividends on its Class A common stock, intending to retain future earnings for business expansion[213](index=213&type=chunk) - Dividends on Series A Preferred Stock accumulate at a fixed rate of **5.5% per annum** on a **$1,000 per share** liquidation preference, with unpaid amounts added to the liquidation preference as paid-in-kind dividends[214](index=214&type=chunk)[217](index=217&type=chunk) [Reserved](index=39&type=section&id=Item%206.%20%5BReserved%5D) This section is reserved [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's strong FY2022 rebound, with revenue increasing **131% to $911.7 million** and Adjusted EBITDA reaching **$316.4 million**, despite a **$29.9 million net loss**, supported by **$132.2 million in cash** and a **$165 million credit facility** [Results of Operations](index=41&type=section&id=Results%20of%20Operations) FY2022 revenue surged **131% to $911.7 million**, with same-store revenue up **120%**, leading to a net loss improvement to **$29.9 million** despite increased SG&A expenses including **$68.4 million** in one-time business combination costs Consolidated Statements of Operations Summary | Metric (in thousands) | FY 2022 | FY 2021 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Revenues** | **$911,705** | **$395,234** | **$516,471** | **131%** | | Gross Profit | $301,734 | $20,979 | $280,755 | 1338% | | Operating Profit (Loss) | $116,625 | $(38,639) | $155,264 | (402)% | | **Net Loss** | **$(29,934)** | **$(126,461)** | **$96,527** | **(76)%** | - Same-store revenue increased by **120% in FY2022** compared to FY2021, reflecting a significant recovery from COVID-19 related closures and restrictions[237](index=237&type=chunk)[238](index=238&type=chunk) - SG&A expenses increased by **131% to $180.7 million**, largely due to **$68.4 million** in transaction costs from the Business Combination; excluding these, SG&A was approximately **12% of revenue**[240](index=240&type=chunk) - The fair value of earnout and warrant liabilities had an unfavorable **$52.6 million impact** on the statement of operations due to an increase in the company's stock price following the Business Combination[244](index=244&type=chunk) [Non-GAAP Measure (Adjusted EBITDA)](index=43&type=section&id=Non-GAAP%20measure) Adjusted EBITDA, a non-GAAP measure, significantly increased to **$316.4 million in FY2022** from **$73.1 million in FY2021**, providing a supplemental view of operating performance by excluding non-recurring and non-core items Adjusted EBITDA Reconciliation | Reconciliation (in thousands) | FY 2022 | FY 2021 | | :--- | :--- | :--- | | **Net loss** | **$(29,934)** | **$(126,461)** | | Interest expense | $94,460 | $88,857 | | Income tax benefit | $(690) | $(1,035) | | D&A and impairment | $108,505 | $91,851 | | Share-based compensation | $50,236 | $3,164 | | Transactional and other advisory costs | $38,140 | $10,737 | | Changes in value of earnouts and warrants | $52,789 | $— | | Other adjustments | $(2,131) | $5,906 | | **Adjusted EBITDA** | **$316,375** | **$73,119** | [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with **$132.2 million in cash** and **$177.7 million in operating cash flow** for FY2022, supported by a **$165 million revolving credit facility**, despite **$220.3 million** used in investing activities Consolidated Cash Flow Summary | Cash Flow (in thousands) | FY 2022 | FY 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $177,670 | $58,232 | | Net cash used in investing activities | $(220,345) | $(46,676) | | Net cash (used in) provided by financing activities | $(12,136) | $34,805 | - As of July 3, 2022, the company had **$132.2 million** of available cash and cash equivalents[260](index=260&type=chunk) - The company refinanced its revolving credit facility, resulting in a new **$165 million** senior secured revolving credit facility maturing in 2026[259](index=259&type=chunk) [Critical Accounting Estimates](index=46&type=section&id=Critical%20Accounting%20Estimates) Critical accounting estimates involve significant judgment, including impairment assessments for long-lived assets, goodwill, and indefinite-lived intangibles, and the valuation of earnout and warrant liabilities using a Monte-Carlo simulation model - Long-lived assets are reviewed for impairment when events indicate the carrying value may not be recoverable, with **$1.5 million** in impairment charges recognized in fiscal 2022[270](index=270&type=chunk)[271](index=271&type=chunk) - Goodwill and indefinite-lived intangible assets are tested for impairment annually, with a qualitative assessment in fiscal 2022 resulting in **no goodwill impairment charge**[273](index=273&type=chunk)[274](index=274&type=chunk) - The fair value of earnout and warrant liabilities is estimated using a Monte-Carlo simulation model, a Level 3 fair value measurement sensitive to unobservable inputs like stock price and volatility[275](index=275&type=chunk) - The company, as an emerging growth company, has elected to use the extended transition period for complying with new or revised financial accounting standards[278](index=278&type=chunk)[279](index=279&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to interest rate, credit, commodity price, and inflation risks, having previously used interest rate hedges that expired on June 30, 2022, and managing commodity volatility within competitive limits - The company is exposed to interest rate risk on its term and revolving credit facilities, with prior interest rate swaps and caps covering approximately **$650 million** of debt expiring on June 30, 2022[283](index=283&type=chunk) - The company faces commodity price risk from fluctuations in food, beverage, and supply costs, mitigated through purchasing commitments and price monitoring[285](index=285&type=chunk) - Inflation affects operating costs, and while the company may adjust prices to recover higher costs, this is limited by the competitive environment[286](index=286&type=chunk) [Financial Statements and Supplementary Data](index=49&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for FY2022 and FY2021, including the auditor's report, balance sheets, income statements, cash flow statements, and comprehensive notes [Report of Independent Registered Public Accounting Firm](index=50&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) KPMG LLP issued an unqualified opinion on the company's consolidated financial statements for FY2022 and FY2021, affirming fair presentation in conformity with U.S. GAAP - KPMG LLP expressed an unqualified opinion on the company's consolidated financial statements for the fiscal years ended July 3, 2022, and June 27, 2021[291](index=291&type=chunk) [Consolidated Financial Statements](index=51&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements show **total assets of $1.85 billion** and **total liabilities of $1.66 billion** as of July 3, 2022, with a net loss of **$29.9 million** and strong operating cash flow of **$177.7 million** for FY2022 Consolidated Balance Sheets | Balance Sheet (in thousands) | July 3, 2022 | June 27, 2021 | | :--- | :--- | :--- | | Total Current Assets | $169,294 | $207,445 | | **Total Assets** | **$1,854,425** | **$1,782,238** | | Total Current Liabilities | $119,160 | $107,373 | | **Total Liabilities** | **$1,662,105** | **$1,452,115** | | Total Stockholders' Deficit | $(13,682) | $(275,866) | Consolidated Statements of Operations | Statement of Operations (in thousands) | FY 2022 | FY 2021 | | :--- | :--- | :--- | | Revenues | $911,705 | $395,234 | | Gross Profit | $301,734 | $20,979 | | Operating Profit (Loss) | $116,625 | $(38,639) | | **Net Loss** | **$(29,934)** | **$(126,461)** | | Net Loss Per Share | $(0.26) | $(0.92) | [Notes to Consolidated Financial Statements](index=59&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies and financial figures, covering reverse recapitalization, business acquisitions, goodwill, debt, income taxes, warrants, earnouts, and stock-based compensation plans - The Business Combination with Isos was accounted for as a reverse recapitalization, with Old Bowlero as the accounting acquirer, and financial statements reflect Old Bowlero's historical operations[325](index=325&type=chunk)[326](index=326&type=chunk)[327](index=327&type=chunk) Revenue by Category (FY 2022) | Revenue by Category (FY 2022) | Amount (in thousands) | % of Total | | :--- | :--- | :--- | | Bowling | $452,349 | 51% | | Food and beverage | $321,441 | 35% | | Amusement | $118,940 | 13% | | Media | $18,975 | 2% | | **Total** | **$911,705** | **100%** | - In fiscal 2022, the company completed **eight business combinations** for total consideration of **$72.7 million** and **two asset acquisitions** (including Bowl America) for **$54.2 million**[414](index=414&type=chunk)[417](index=417&type=chunk) - As of July 3, 2022, the company had total debt of **$876.7 million**, primarily consisting of a First Lien Credit Facility Term Loan[444](index=444&type=chunk) - The company has U.S. federal net operating loss (NOL) carryforwards of **$460.6 million**, with **$276.1 million** subject to limitation and a **$138.6 million** valuation allowance recorded against deferred tax assets[468](index=468&type=chunk)[469](index=469&type=chunk)[470](index=470&type=chunk) - All outstanding public and private warrants were redeemed as of May 16, 2022, and the company no longer has any warrants outstanding[397](index=397&type=chunk)[481](index=481&type=chunk) - The company has three stock incentive plans: the 2017 Plan (no new grants), the 2021 Omnibus Incentive Plan, and an Employee Stock Purchase Plan (ESPP) effective July 1, 2022[514](index=514&type=chunk)[528](index=528&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosures](index=91&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosures) The company reports no changes in or disagreements with its accountants regarding accounting and financial disclosures - None[533](index=533&type=chunk) [Controls and Procedures](index=91&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were not effective as of July 3, 2022, due to material weaknesses in internal controls over financial reporting, for which a remediation plan is being implemented - Management concluded that disclosure controls and procedures were not effective as of July 3, 2022, due to identified material weaknesses[536](index=536&type=chunk) - Material weaknesses were identified in controls over acquisition accounting, fixed assets, certain financial reporting disclosures, and IT system access controls to establish segregation of duties[537](index=537&type=chunk) - A remediation plan is being implemented, including additional training, hiring staff with technical accounting skills, and engaging third-party experts[537](index=537&type=chunk) - As a newly public company, a management report on internal control over financial reporting is not yet required and will be included in the annual report for the fiscal year ending July 2, 2023[538](index=538&type=chunk)[539](index=539&type=chunk) [Other Information](index=92&type=section&id=Item%209B.%20Other%20Information) The company reports no other information - None[542](index=542&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspection](index=92&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspection) This section is not applicable to the company - Not applicable[543](index=543&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=93&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance will be incorporated by reference from the definitive Proxy Statement, and the company has adopted a Code of Conduct and Ethics - Information required by this item is incorporated by reference from the definitive Proxy Statement, expected to be filed within **120 days** of the fiscal year end[546](index=546&type=chunk) - The company has adopted a Code of Conduct and Business Ethics applicable to all directors, officers, and employees, posted on its investor relations website[547](index=547&type=chunk) [Executive Compensation](index=93&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation will be incorporated by reference from the definitive Proxy Statement - Information required by this item is incorporated by reference from the definitive Proxy Statement[548](index=548&type=chunk) [Security Ownership of Certain Beneficial Owner and Management and Related Stockholder Matters](index=93&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owner%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership will be incorporated by reference from the definitive Proxy Statement - Information required by this item is incorporated by reference from the definitive Proxy Statement[549](index=549&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=93&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding certain relationships, related transactions, and director independence will be incorporated by reference from the definitive Proxy Statement - Information required by this item is incorporated by reference from the definitive Proxy Statement[550](index=550&type=chunk) [Principal Accounting Fees and Services](index=93&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information regarding principal accounting fees and services will be incorporated by reference from the definitive Proxy Statement - Information required by this item is incorporated by reference from the definitive Proxy Statement[551](index=551&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=94&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section provides an index to the consolidated financial statements and lists all exhibits filed with the Form 10-K, including key agreements and certifications, with financial statement schedules omitted - This section contains the index to the consolidated financial statements and a list of all exhibits filed with the report[554](index=554&type=chunk)[555](index=555&type=chunk) [Form 10-K Summary](index=96&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company reports no Form 10-K summary - None[560](index=560&type=chunk)

Financial Data and Key Metrics Changes - Revenue increased by 129.8% year-over-year, surpassing pre-pandemic levels by 25.8% [6][7] - Adjusted EBITDA reached $108.4 million, an increase of $81 million or 295.7% year-over-year, and $41 million or 60.9% relative to pre-pandemic performance [7][12] - Cash generated from operations was $83.6 million in Q3 [7][16] Business Line Data and Key Metrics Changes - Strong growth in walk-in retail revenue and event revenue contributed to overall revenue increase [6][10] - Same-store sales rose 12.2% relative to pre-pandemic levels [6] - Gross margin for bowling centers expanded 96 basis points to 70% compared to the pre-pandemic quarter [15] Market Data and Key Metrics Changes - California outperformed with a same-store sales increase of approximately 35%, while the East Coast saw increases of 15% to 20% [44] - The event business has recovered and is comping positively compared to pre-pandemic levels [10][25] Company Strategy and Development Direction - The company is focused on organic growth and center additions, with a robust pipeline of about 30 locations in various stages of development [20][22] - Management is optimistic about the potential for further growth in league pricing and corporate events [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience during potential economic downturns, citing past performance during recessions [34][36] - The company has a recession contingency plan in place to manage through economic challenges [38][39] Other Important Information - The company repurchased 109,754 shares of Class A common stock and nearly 2.7 million warrants during the quarter [8] - The company finished the quarter with nearly $173 million in cash [16] Q&A Session Summary Question: Impact of mask mandate lift on New York City centers - Management indicated that the vaccine mandate had a more significant impact than the mask mandate, with a 50% decline in business during the vaccine mandate [18][19] Question: Update on remodels, new builds, and acquisition pipeline - There are about 30 locations in the pipeline, including new builds and acquisitions, with 25 remodels underway [20][21] Question: Recovery stage of league and event business - League play is back to even, with potential for price increases, while the event business is recovering positively [24][25] Question: Impact of rising inflation on the business - Two-thirds of the business is not significantly impacted by inflation, allowing for price increases in other areas [27][28] Question: Business performance during past recessions - The company has shown resilience during past recessions, with only minor revenue declines [36][37] Question: Update on partnership with Skillz - The partnership is ongoing but not a significant driver of economic performance [40] Question: Recent sales trends and regional performance - Recent sales increases of 45% and 55% in March and April reflect same-store comparisons versus 2019 [42][43] - California is the best-performing region, while the East Coast is lagging behind [44]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 27, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 001-40142 BOWLERO CORP. (Exact name of registrant as specified in its charter) Delaware 98-1632024 (State or other jurisdiction of incorporation or ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 26, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 001-40142 Bowlero Corp. (Exact name of registrant as specified in its charter) | --- | |-------| | | | | | | | | | | | | | | | | | | | | | | | | Delaware (State or ...

[PART I – FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This section presents the company's unaudited financial statements, management's discussion, market risk disclosures, and control procedures [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents unaudited condensed financial statements, notes on accounting policies, IPO, related parties, and a restatement [Condensed Balance Sheets (unaudited)](index=4&type=section&id=Condensed%20Balance%20Sheets%20(unaudited)) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific dates | Metric | September 30, 2021 ($) | December 31, 2020 ($) | |:----------------------------|:-------------------|:------------------| | Cash | $1,215,849 | $— | | Total Current Assets | $1,421,326 | $47,500 | | Marketable Securities in Trust Account | $254,845,389 | $— | | Total Assets | $256,345,825 | $47,500 | | Total Current Liabilities | $221,963 | $27,500 | | Forward Purchase Agreement Liability | $4,225,138 | $— | | Warrant Liability | $19,233,202 | $— | | Total Liabilities | $32,599,598 | $27,500 | | Class A Ordinary Shares Subject to Redemption | $254,844,389 | $— | | Total Shareholders' (Deficit) Equity | $(31,098,162) | $20,000 | [Condensed Statements of Operations (unaudited)](index=5&type=section&id=Condensed%20Statements%20of%20Operations%20(unaudited)) This section details the company's financial performance, including revenues, expenses, and net loss over specific periods | Metric | Three Months Ended Sep 30, 2021 ($) | Nine Months Ended Sep 30, 2021 ($) | |:----------------------------------------|:--------------------------------|:-------------------------------| | General and Administrative Expenses | $785,494 | $1,260,847 | | Loss from Operations | $(785,494) | $(1,260,847) | | Trust Interest Income | $3,848 | $7,389 | | Unrealized Loss on Change in Fair Value of FPA | $(2,208,594) | $(3,667,048) | | Unrealized Loss on Change in Fair Value of Warrants | $(5,266,872) | $(811,507) | | Total Other Expense | $(7,471,618) | $(5,110,013) | | Net Loss | $(8,257,112) | $(6,370,860) | | Basic and Diluted Net Loss Per Ordinary Share (Class A) | $(0.26) | $(0.26) | | Basic and Diluted Net Loss Per Ordinary Share (Class B) | $(0.25) | $(0.25) | [Condensed Statements of Changes in Shareholders' Equity (Deficit) (unaudited)](index=6&type=section&id=Condensed%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity%20(Deficit)%20(unaudited)) This section outlines the changes in the company's equity, reflecting net losses, share transactions, and reclassifications - The company's total shareholders' equity (deficit) decreased significantly from **$20,000** at December 31, 2020, to **$(31,098,162)** at September 30, 2021, primarily due to net losses and reclassifications related to Class A ordinary shares subject to possible redemption and warrant/FPA liabilities[14](index=14&type=chunk) - Key changes include the sale of IPO units and private placement warrants, incurring underwriting and offering costs, initial classification of warrant and FPA liabilities, forfeiture of founder shares, and the impact of net losses[14](index=14&type=chunk) [Condensed Statement of Cash Flows (unaudited)](index=7&type=section&id=Condensed%20Statement%20of%20Cash%20Flows%20(unaudited)) This section summarizes the cash inflows and outflows from operating, investing, and financing activities | Cash Flow Activity | Nine Months Ended Sep 30, 2021 ($) | |:-------------------------------|:-------------------------------| | Net Cash Used in Operating Activities | $(1,178,204) | | Net Cash Used in Investing Activities | $(254,838,000) | | Net Cash Provided by Financing Activities | $257,232,053 | | Net Change in Cash | $1,215,849 | | Cash, End of the Period | $1,215,849 | - Significant non-cash activities include deferred underwriting commissions (**$8,919,295**), initial value of Class A ordinary shares subject to possible redemption (**$254,837,000**), and initial classification of warrant and FPA liabilities (**$18,421,695** and **$558,090** respectively)[17](index=17&type=chunk) [Notes to Condensed Financial Statements (unaudited)](index=8&type=section&id=Notes%20to%20Condensed%20Financial%20Statements%20(unaudited)) This section provides detailed explanations and disclosures supporting the condensed financial statements [Note 1 - Organization and Business Operations](index=8&type=section&id=Note%201%20-%20Organization%20and%20Business%20Operations) This note details the company's formation, purpose as a SPAC, IPO, and proposed business combination with Bowlero Corp - Isos Acquisition Corporation (the "Company") was incorporated on December 29, 2020, as a Cayman Islands exempted company, primarily for effecting a business combination[20](index=20&type=chunk) - On July 1, 2021, the Company entered into a Business Combination Agreement (BCA) with Bowlero Corp., the world's largest owner and operator of bowling centers[20](index=20&type=chunk)[24](index=24&type=chunk) - Post-merger, the Company will be renamed "Bowlero" and its stock will trade under "BOWL" on the NYSE[20](index=20&type=chunk)[24](index=24&type=chunk) - The Company consummated its Initial Public Offering (IPO) on March 5, 2021, selling **22,500,000 units** at **$10.00 per unit**, generating **$225,000,000** gross proceeds, and simultaneously sold **5,000,000 Private Placement Warrants** for **$7,500,000**[25](index=25&type=chunk)[26](index=26&type=chunk) - Following the IPO and over-allotment exercise, **$254,837,000** was placed in a Trust Account, to be invested in U.S. government securities or money market funds, pending the completion of a Business Combination[30](index=30&type=chunk) - As of September 30, 2021, the Company had approximately **$1.2 million** in its operating bank account and working capital, with management believing it has sufficient liquidity to meet needs through the earlier of a Business Combination or one year from filing[38](index=38&type=chunk)[41](index=41&type=chunk) [Note 2 — Restatement of Previously Issued Financial Statements](index=10&type=section&id=Note%202%20%E2%80%94%20Restatement%20of%20Previously%20Issued%20Financial%20Statements) This note explains the restatement of financial statements due to reclassification of Class A ordinary shares - The Company restated its previously reported financial statements to reclassify Class A ordinary shares subject to possible redemption as temporary equity in their entirety, in accordance with ASC 480-10-S99, as redemption provisions are outside the Company's control[43](index=43&type=chunk) - This reclassification resulted in adjustments to additional paid-in capital, accumulated deficit, and Class A ordinary shares, and also impacted the earnings per share calculation to allocate net income (loss) pro rata to Class A and Class B ordinary shares[43](index=43&type=chunk)[45](index=45&type=chunk) - The restatement did not change the Company's total assets, liabilities, or operating results, only the classification within equity[47](index=47&type=chunk) [Note 3 - Significant Accounting Policies](index=12&type=section&id=Note%203%20-%20Significant%20Accounting%20Policies) This note outlines the key accounting principles and methods used in preparing the financial statements - The unaudited condensed financial statements are prepared in conformity with US GAAP and SEC rules, with management making estimates for fair value measurements of financial instruments[49](index=49&type=chunk)[53](index=53&type=chunk) - The Company is an "emerging growth company" under the JOBS Act and has elected to use the extended transition period for complying with new or revised financial accounting standards, which may affect comparability with other public companies[51](index=51&type=chunk)[52](index=52&type=chunk) - Marketable securities in the Trust Account are classified as trading securities and measured at fair value, with gains/losses included in Trust interest income[54](index=54&type=chunk) - Fair value measurements are categorized into a three-tier hierarchy (Level 1, 2, 3), with Private Placement Warrants and Forward Purchase Agreement (FPA) liabilities classified as Level 3 due to unobservable inputs[56](index=56&type=chunk)[59](index=59&type=chunk) - All Class A ordinary shares are classified outside of permanent equity due to redemption features not solely within the Company's control, with changes in redemption value recognized immediately[61](index=61&type=chunk)[62](index=62&type=chunk) - Warrants are accounted for as derivative instruments, recorded at fair value at grant date and re-valued at each reporting date, with changes reported in the statements of operations[67](index=67&type=chunk) - The Company accounts for income taxes under ASC 740, recognizing deferred tax assets/liabilities and establishing a valuation allowance if needed, and notes no taxation on income by the Cayman Islands government[69](index=69&type=chunk)[73](index=73&type=chunk) [Note 4 - Initial Public Offering](index=16&type=section&id=Note%204%20-%20Initial%20Public%20Offering) This note details the terms and proceeds of the company's initial public offering, including warrants - The IPO involved selling **22,500,000 units** at **$10.00 each**, with each unit comprising one Class A ordinary share and one-third of one redeemable warrant[75](index=75&type=chunk) - The underwriters partially exercised an over-allotment option for an additional **2,983,700 units**[76](index=76&type=chunk) - Public warrants become exercisable on the later of 30 days after the initial Business Combination or 12 months from IPO closing, expiring five years after the Business Combination[75](index=75&type=chunk)[78](index=78&type=chunk) - The Company may redeem outstanding warrants for cash at **$0.01 per warrant** if Class A ordinary shares equal or exceed **$18.00**, or at **$0.10 per warrant** if shares equal or exceed **$10.00** (with cashless exercise option)[81](index=81&type=chunk)[83](index=83&type=chunk) [Note 5 - Private Placement](index=18&type=section&id=Note%205%20-%20Private%20Placement) This note describes the private placement of warrants to the Sponsor and LionTree Partners LLC - The Sponsor and LionTree Partners LLC purchased **5,000,000 Private Placement Warrants** at **$1.50 each**, generating **$7,500,000**, with additional purchases made upon over-allotment exercise[86](index=86&type=chunk)[87](index=87&type=chunk) - Private Placement Warrants are subject to transfer restrictions and are generally not redeemable by the Company as long as held by the Sponsor or its permitted transferees, who also have a cashless exercise option[88](index=88&type=chunk) [Note 6 - Related Party Transactions](index=18&type=section&id=Note%206%20-%20Related%20Party%20Transactions) This note discloses transactions and agreements between the company and its related parties, including the Sponsor - The Sponsor initially received **5,750,000 Class B ordinary shares** for **$25,000**, which increased to **6,468,750 founder shares** after a stock dividend, with **97,825 shares** forfeited due to partial over-allotment exercise[89](index=89&type=chunk)[118](index=118&type=chunk) - The Sponsor and founding team waived redemption rights for their founder shares and public shares in connection with a Business Combination or certain charter amendments, and agreed to vote in favor of the initial Business Combination[90](index=90&type=chunk) - The Sponsor overfunded the Trust Account by **$1,000** as of September 30, 2021, which the Company intends to return[93](index=93&type=chunk) - The Sponsor provided an unsecured, non-interest-bearing promissory note loan of **$125,267** to the Company, which was repaid in full on March 15, 2021[94](index=94&type=chunk)[95](index=95&type=chunk) - The Company pays an affiliate of the Sponsor **$51,667 per month** for administrative services, totaling **$155,001** for the three months and **$361,669** for the nine months ended September 30, 2021[97](index=97&type=chunk) [Note 7 - Fair Value Measurements](index=20&type=section&id=Note%207%20-%20Fair%20Value%20Measurements) This note details the fair value hierarchy and valuation methods for financial instruments and liabilities | Asset/Liability | September 30, 2021 ($) | Fair Value Hierarchy | |:---------------------------------|:-------------------|:---------------------| | Money Market Funds in Trust Account | $254,845,389 | Level 1 | | FPA Liability | $4,225,138 | Level 3 | | Warrant Liability - Private Placement Warrants | $7,510,700 | Level 3 | | Warrant Liability - Public Warrants | $11,722,502 | Level 1 | - The initial fair value of Public Warrants and Private Placement Warrants was established using a Monte Carlo simulation model, classifying them as Level 3 due to unobservable inputs[101](index=101&type=chunk) - As of September 30, 2021, Public Warrants are classified as Level 1 due to observable market quotes, while Private Placement Warrants and FPA liability remain Level 3, valued using a Monte Carlo simulation[103](index=103&type=chunk)[104](index=104&type=chunk) | Input | Warrant Liability (Sep 30, 2021) | FPA Liability (Sep 30, 2021) | |:--------------------------|:---------------------------------|:-----------------------------| | Expected Term (years) | 5.29 | 0.27 | | Expected Volatility | 29.3% | N/A | | Risk-Free Interest Rate | 1.03% | 0.04% | | Stock Price | $9.98 | $9.88 | | Warrant Value | $1.39 | N/A | | Change in Fair Value (Level 3 Liability) | Warrant Liability ($) | FPA Liability ($) | |:-----------------------------------------|:------------------|:--------------| | Fair value as of December 31, 2020 | $— | $— | | Initial fair value | $18,421,695 | $558,090 | | Transfer out of Level 3 to Level 1 | $(8,494,567) | $— | | Change in fair value | $(2,416,428) | $3,667,048 | | Fair value as of September 30, 2021 | $7,510,700 | $4,225,138 | [Note 8 - Commitments and Contingencies](index=21&type=section&id=Note%208%20-%20Commitments%20and%20Contingencies) This note outlines the company's contractual obligations, potential liabilities, and business combination agreements - Holders of founder shares, Private Placement Warrants, and securities from the forward purchase agreement are entitled to registration rights[108](index=108&type=chunk) - The Company granted underwriters a 45-day over-allotment option and incurred a fixed underwriting discount of **$4,500,000**, plus a deferred underwriting discount of **3.5%** (**$7,875,000**) payable upon Business Combination completion[109](index=109&type=chunk)[110](index=110&type=chunk) - The Forward Purchase Agreement (FPA) with Apollo affiliates was amended to increase the purchase of units to **10,000,000** for **$100,000,000**, to occur concurrently with the Business Combination closing[112](index=112&type=chunk) - The Business Combination Agreement with Bowlero Corp. outlines a merger where Bowlero will merge into the Company, which will then be renamed "Bowlero," with Bowlero's stockholders receiving cash, common stock, and preferred stock[115](index=115&type=chunk) [Note 9 - Shareholders' Equity](index=22&type=section&id=Note%209%20-%20Shareholders%27%20Equity) This note details the authorized and outstanding share capital, including Class A and Class B ordinary shares - The Company is authorized to issue **1,000,000 preference shares**, **300,000,000 Class A ordinary shares**, and **20,000,000 Class B ordinary shares**[116](index=116&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk) - As of September 30, 2021, there were no preference shares or Class A ordinary shares (excluding **25,483,700 shares** subject to possible redemption) issued and outstanding, but **6,370,925 Class B ordinary shares** were outstanding[117](index=117&type=chunk)[118](index=118&type=chunk) - Class B ordinary shares will automatically convert into Class A ordinary shares upon consummation of the initial Business Combination, at a ratio ensuring they represent **20%** of the total ordinary shares outstanding post-combination[120](index=120&type=chunk) [Note 10 - Subsequent Events](index=22&type=section&id=Note%2010%20-%20Subsequent%20Events) This note confirms the evaluation of events occurring after the reporting period, with no material adjustments - The Company evaluated subsequent events up to the financial statement issuance date and identified no events requiring adjustment or disclosure[121](index=121&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section discusses the company's financial condition, results of operations, liquidity, and critical accounting policies as a blank check company - The Company is a blank check company formed to effect a business combination, with plans to merge with Bowlero Corp., which will result in the Company being renamed "Bowlero" and its stock listed under "BOWL" on the NYSE[125](index=125&type=chunk)[130](index=130&type=chunk) - The issuance of additional shares in a business combination could significantly dilute existing equity interests, subordinate Class A ordinary shares if preference shares are issued, and potentially affect control or market prices[126](index=126&type=chunk) - Incurring significant debt could lead to default, acceleration of obligations, inability to obtain additional financing, and limitations on dividend payments and operational flexibility[128](index=128&type=chunk) | Metric | Three Months Ended Sep 30, 2021 ($) | Nine Months Ended Sep 30, 2021 ($) | |:----------------------------------------|:--------------------------------|:-------------------------------| | Net Loss | $(8,257,112) | $(6,370,860) | | Operating Costs | $785,494 | $1,260,847 | | Trust Interest Income | $3,848 | $7,389 | | Unrealized Loss on Change in Fair Value of Warrants | $(5,266,872) | $(811,507) | | Unrealized Loss on Change in Fair Value of FPA | $(2,208,594) | $(3,667,048) | - As of September 30, 2021, the Company had **$1.2 million** in its operating bank account and working capital, with management expecting sufficient liquidity until the earlier of a Business Combination or one year from filing[136](index=136&type=chunk)[139](index=139&type=chunk) - The Company classifies all Class A ordinary shares subject to redemption as temporary equity and accounts for warrants as liability-classified derivative instruments, with fair value changes recognized in operations[141](index=141&type=chunk)[145](index=145&type=chunk)[146](index=146&type=chunk) - The Company has no off-balance sheet arrangements and, as an emerging growth company, elects to delay adoption of new accounting standards and may rely on other reduced reporting requirements under the JOBS Act[147](index=147&type=chunk)[148](index=148&type=chunk)[149](index=149&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=27&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section states that market risk disclosures are not required for the company as a smaller reporting company - Quantitative and Qualitative Disclosures about Market Risk are not required for smaller reporting companies[151](index=151&type=chunk) [Item 4. Control and Procedures](index=27&type=section&id=Item%204.%20Control%20and%20Procedures) Management concluded disclosure controls were ineffective due to a material weakness in classifying complex financial instruments, leading to restatements - The Company's disclosure controls and procedures were deemed ineffective as of September 30, 2021, due to a material weakness in analyzing complex financial instruments, including the proper classification of warrants as liabilities and redeemable Class A ordinary shares as temporary equity[153](index=153&type=chunk) - This material weakness necessitated restatements of previously filed financial statements for March 31, 2021, and June 30, 2021, to correctly classify all Class A ordinary shares as temporary equity[154](index=154&type=chunk) - The non-cash adjustments from the restatements did not impact the reported cash, cash equivalents, or total assets[155](index=155&type=chunk) - Remediation plans include enhanced access to accounting literature, research materials, and increased communication among personnel and third-party professionals to address complex accounting applications[156](index=156&type=chunk) [PART II – OTHER INFORMATION](index=28&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and exhibits [Item 1. Legal Proceedings](index=28&type=section&id=Item%201.%20Legal%20Proceedings) This section confirms that there are no legal proceedings to report - There are no legal proceedings to report[160](index=160&type=chunk) [Item 1A. Risk Factors](index=28&type=section&id=Item%201A.%20Risk%20Factors) This section reports no material changes to previously disclosed risk factors - No material changes from the risk factors previously disclosed in the Company's final prospectus dated March 2, 2021, and subsequent Form 10-Q filings[162](index=162&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=28&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section confirms no unregistered sales of equity securities or use of proceeds to report - There were no unregistered sales of equity securities and no use of proceeds to report[164](index=164&type=chunk) [Item 3. Defaults Upon Senior Securities](index=28&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section confirms no defaults upon senior securities - There were no defaults upon senior securities[166](index=166&type=chunk) [Item 4. Mine Safety Disclosures](index=28&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable[168](index=168&type=chunk) [Item 5. Other Information](index=28&type=section&id=Item%205.%20Other%20Information) This section confirms no other information to report - There is no other information to report[170](index=170&type=chunk) [Item 6. Exhibits](index=29&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed or incorporated by reference, including the Business Combination Agreement and certifications - Key exhibits include the Business Combination Agreement with Bowlero Corp., Form of Common and Preferred Subscription Agreements, Amended and Restated Forward Purchase Agreement, and various certifications (e.g., Section 302 and 906 of Sarbanes-Oxley Act)[173](index=173&type=chunk) [SIGNATURES](index=30&type=section&id=SIGNATURES) This section contains the signatures of the Co-Chairman and Co-CEO, Michelle Wilson, and CFO, Winston Meade - The report is signed by Michelle Wilson, Co-Chairman of the Board and Co-Chief Executive Officer, and Winston Meade, Chief Financial Officer, on November 15, 2021[177](index=177&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-40142 ISOS ACQUISITION CORPORATION (Exact name of registrant as specified in its charter) CaymanIslands (State or other jurisdiction of ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-40142 ISOS ACQUISITION CORPORATION (Exact name of registrant as specified in its charter) Cayman Islands N/A (State or other jurisdict ...