☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
June 30, 2022
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
CORPORATION
Cayman Islands | N/A | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||
Emerging growth company | ☒ |
March 31, 2021 | December 31, 2020 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash | $ | 867,295 | $ | 100 | ||||
Prepaid expenses | 359,000 | — | ||||||
Total Current Assets | 1,226,295 | 100 | ||||||
Deferred offering costs | — | 482,129 | ||||||
Investment held in Trust Account | 414,004,425 | — | ||||||
TOTAL ASSETS | $ | 415,230,720 | $ | 482,229 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities | ||||||||
Accrued expenses | $ | 204,167 | $ | — | ||||
Accrued offering costs | 364,451 | 326,235 | ||||||
Promissory note - related party | 7,000 | 135,994 | ||||||
Total Current Liabilities | 575,618 | 462,229 | ||||||
Forward Purchase Agreement (FPA) liability | 88,302 | |||||||
Warrant liability | 25,418,591 | — | ||||||
Deferred underwriting fee payable | 14,490,000 | — | ||||||
Total Liabilities | 40,572,511 | 462,229 | ||||||
Commitments and Contingencies | ||||||||
Class A ordinary shares subject to possible redemption 36,965,820 and 0 shares at $10.00 per share redemption value as of March 31, 2021 and December 31, 2020, respectively | 369,658,200 | — | ||||||
Shareholders’ Equity | ||||||||
Preference shares, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding | — | — | ||||||
Class A ordinary shares, $0.0001 par value; 400,000,000 shares authorized; 4,434,180 and 0 shares issued and outstanding (excluding 36,965,820 and 0 shares subject to possible redemption) as of March 31, 2021 and December 31, 2020, respectively | 443 | — | ||||||
Class B ordinary shares, $0.0001 par value; 40,000,000 shares authorized; 12,350,000 shares issued and outstanding at March 31, 2021 and December 31, 2020 | 1,235 | 1,235 | ||||||
Additional paid-in capital | — | 23,765 | ||||||
Retained earnings (Accumulated deficit) | 4,998,331 | (5,000 | ) | |||||
Total Shareholders’ Equity | 5,000,009 | 20,000 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 415,230,720 | $ | 482,229 |
June 30, 2022 | December 31, 2021 | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash | $ | 122,569 | $ | 497,619 | ||||
Prepaid expenses | 296,421 | 25,984 | ||||||
Total Current Assets | 418,990 | 523,603 | ||||||
Forward Purchase Agreement (FPA) asset | 42,274 | 572,828 | ||||||
Investment held in Trust Account | 414,646,746 | 414,024,299 | ||||||
TOTAL ASSETS | $ | 415,108,010 | $ | 415,120,730 | ||||
LIABILITIES AND SHAREHOLDERS’ DEFICIT | ||||||||
Current liabilities | ||||||||
Accrued expenses | $ | 4,550,544 | $ | 2,526,858 | ||||
Due to related party | 170,000 | 110,000 | ||||||
Promissory note—related party | 7,000 | 7,000 | ||||||
Convertible promissory note | 504,923 | — | ||||||
Total Current Liabilities | 5,232,467 | 2,643,858 | ||||||
Warrant liabilities | 8,145,644 | 20,879,840 | ||||||
Deferred underwriting fee payable | 14,490,000 | 14,490,000 | ||||||
Total Liabilities | 27,868,111 | 38,013,698 | ||||||
Commitments and Contingencies (Note 6) | 0 | 0 | ||||||
Class A redeemable ordinary shares subject to possible redemption, $0.0001 par value, 400,000,000 shares authorized; 41,400,000 shares at $10.02 and $10.00 per share redemption value as of June 30, 2022 and December 31, 2021, respectively | 414,646,746 | 414,000,000 | ||||||
Shareholders’ Deficit | ||||||||
Preference shares, $0.0001 par value; 1,000,000 shares authorized; 0 shares issued or outstanding | — | — | ||||||
Class B non-redeemable ordinary shares, $0.0001 par value; 40,000,000 shares authorized; 12,350,000 shares issued and outstanding at June 30, 2022 and December 31, 2021 | 1,235 | 1,235 | ||||||
Additional paid-in capital | — | — | ||||||
Accumulated deficit | (27,408,082 | ) | (36,894,203 | ) | ||||
Total Shareholders’ Deficit | (27,406,847 | ) | (36,892,968 | ) | ||||
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT | $ | 415,108,010 | $ | 415,120,730 | ||||
1
THREE MONTHS ENDED MARCH 31, 2021
General and administrative expenses | $ | 685,200 | ||
Loss from operations | (685,200 | ) | ||
Other income (expense): | ||||
Change in fair value of FPA | (88,302 | ) | ||
Change in fair value of warrant liabilities | 21,291,339 | |||
Transaction costs allocable to warrants | (2,092,043 | ) | ||
Interest earned on investment held in Trust Account | 4,425 | |||
Other income, net | 19,115,419 | |||
Net income | $ | 18,430,219 | ||
Weighted average shares outstanding, Class A redeemable ordinary shares | 41,400,000 | |||
Basic and diluted net income per share, Class A redeemable ordinary shares | $ | 0.00 | ||
Weighted average shares outstanding, Class B non-redeemable ordinary shares | 11,960,000 | |||
Basic and diluted net income per share, Class B non-redeemable ordinary shares | $ | 1.54 |
For the Three Months Ended June 30, 2022 | For the Three Months Ended June 30, 2021 | For the Six Months Ended June 30, 2022 | For the Six Months Ended June 30, 2021 | |||||||||||||
General and administrative expenses | $ | 1,055,498 | $ | (154,565 | ) | $ | 2,688,299 | $ | 530,635 | |||||||
Income (loss) from operations | (1,055,498 | ) | 154,565 | (2,688,299 | ) | (530,635 | ) | |||||||||
Other income (expense) | ||||||||||||||||
Change in fair value of FPA | (354,783 | ) | (153,019 | ) | (530,554 | ) | (241,321 | ) | ||||||||
Change in fair value of warrant liabilities | 10,673,231 | (6,326,987 | ) | 12,734,196 | 14,964,352 | |||||||||||
Transaction costs allocable to warrant liabilities | — | — | — | (2,092,043 | ) | |||||||||||
Change in fair value of convertible promissory note | (4,745 | ) | — | (4,923 | ) | — | ||||||||||
Interest earned on investment held in Trust Account | 588,028 | 6,292 | 622,447 | 10,717 | ||||||||||||
Total other income (expense), net | $ | 10,901,731 | $ | (6,473,714 | ) | $ | 12,821,166 | $ | 12,641,705 | |||||||
Net income (loss) | $ | 9,846,233 | $ | (6,319,149 | ) | $ | 10,132,867 | $ | 12,111,070 | |||||||
Weighted average shares outstanding, Class A redeemable ordinary shares | 41,400,000 | 41,400,000 | 41,400,000 | 35,453,039 | ||||||||||||
Basic and diluted net income (loss) per share, Class A redeemable ordinary shares | $ | 0.18 | $ | (0.12 | ) | $ | 0.19 | $ | 0.25 | |||||||
Weighted average shares outstanding, Class B non-redeemable ordinary shares | 12,350,000 | 12,350,000 | 12,350,000 | 12,156,077 | ||||||||||||
Basic and diluted net income (loss) per share, Class B non-redeemable ordinaryshares | $ | 0.18 | $ | (0.12 | ) | $ | 0.19 | $ | 0.25 | |||||||
2
DEFICIT
JUNE 30, 2022
Class A Ordinary Shares | Class B Ordinary Shares | Additional Paid-in | Retained Earnings (Accumulated | Total Shareholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit) | Equity | ||||||||||||||||||||||
Balance — January 1, 2021 | — | $ | — | 12,350,000 | $ | 1,235 | $ | 23,765 | $ | (5,000 | ) | $ | 20,000 | |||||||||||||||
Sale of 41,400,000 Units, net of underwriting discounts, offering expenses and warrant liabilities | 41,400,000 | 4,140 | — | — | 356,203,850 | — | 356,207,990 | |||||||||||||||||||||
Class A ordinary shares subject to redemption | (36,965,820 | ) | (3,697 | ) | — | — | (356,227,615 | ) | (13,426,888 | ) | (369,658,200 | ) | ||||||||||||||||
Net income | — | — | — | — | — | 18,430,219 | 18,430,219 | |||||||||||||||||||||
Balance – March 31, 2021 | 4,434,180 | $ | 443 | 12,350,000 | $ | 1,235 | $ | — | $ | 4,998,331 | $ | 5,000,009 |
Class A Ordinary Shares | Class B Ordinary Shares | Additional | Accumulated | Total Shareholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Paid-In Capital | Deficit | Deficit | ||||||||||||||||||||||
Balance as of January 1, 2022 | — | $ | — | 12,350,000 | $ | 1,235 | $ | — | $ | (36,894,203 | ) | $ | (36,892,968 | ) | ||||||||||||||
Net income | — | — | — | — | — | 286,634 | 286,634 | |||||||||||||||||||||
Balance as of March 31, 2022 | — | — | 12,350,000 | 1,235 | — | (36,607,569 | ) | (36,606,334 | ) | |||||||||||||||||||
Accretion of Class A ordinary shares to redemption amount | — | — | — | — | — | (646,746 | ) | (646,746 | ) | |||||||||||||||||||
Net income | — | — | — | — | — | 9,846,233 | 9,846,233 | |||||||||||||||||||||
Balance as of June 30, 2022 | — | $ | — | 12,350,000 | $ | 1,235 | $ | — | $ | (27,408,082 | ) | $ | (27,406,847 | ) | ||||||||||||||
3
CHANGES IN SHAREHOLDERS’ DEFICIT
Cash Flows from Operating Activities: | ||||
Net income | $ | 18,430,219 | ||
Adjustments to reconcile net income to net cash used in operating activities: | ||||
Interest earned on investment held in Trust Account | (4,425 | ) | ||
Change in fair value of FPA | 88,302 | |||
Change in fair value of warrant liabilities | (21,291,339 | ) | ||
Transaction costs incurred in connection with Initial Public Offering | 2,092,043 | |||
Changes in operating assets and liabilities: | ||||
Prepaid expenses | (359,000 | ) | ||
Accrued expenses | 204,167 | |||
Net cash used in operating activities | (840,033 | ) | ||
Cash Flows from Investing Activities: | ||||
Investment of cash into Trust Account | (414,000,000 | ) | ||
Net cash used in investing activities | (414,000,000 | ) | ||
Cash Flows from Financing Activities: | ||||
Proceeds from sale of Units, net of underwriting discounts paid | 405,720,000 | |||
Proceeds from sale of Private Placement Warrants | 10,280,000 | |||
Repayment of promissory note – related party | (191,819 | ) | ||
Payment of offering costs | (100,953 | ) | ||
Net cash provided by financing activities | 415,707,228 | |||
Net Change in Cash | 867,195 | |||
Cash – Beginning of period | 100 | |||
Cash – End of period | $ | 867,295 | ||
Non-Cash investing and financing activities: | ||||
Offering costs included in accrued offering costs | $ | 38,216 | ||
Offering costs paid through promissory note | $ | 62,825 | ||
Initial classification of Class A ordinary shares subject to possible redemption | $ | 337,272,220 | ||
Change in value of Class A ordinary shares subject to possible redemption | $ | 32,385,980 | ||
Deferred underwriting fee payable | $ | 14,490,000 |
Class A Ordinary Shares | Class B Ordinary Shares | Additional Paid-In Capital | Accumulated Deficit | Total Shareholders’ Equity (Deficit) | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance as of January 1, 2021 | — | $ | — | 12,350,000 | $ | 1,235 | $ | 23,765 | $ | (5,000 | ) | $ | 20,000 | |||||||||||||||
Accretion of Class A ordinary shares to redemption amount | — | — | — | — | (23,765 | ) | (57,768,245 | ) | (57,792,010 | ) | ||||||||||||||||||
Net income | — | — | — | — | — | 18,430,219 | 18,430,219 | |||||||||||||||||||||
Balance as of March 31, 2021 | — | — | 12,350,000 | 1,235 | — | (39,343,026 | ) | (39,341,791 | ) | |||||||||||||||||||
Net loss | — | — | — | — | — | (6,319,149 | ) | (6,319,149 | ) | |||||||||||||||||||
Balance as of June 30, 2021 | — | $ | — | 12,350,000 | $ | 1,235 | $ | — | $ | (45,662,175 | ) | $ | (45,660,940 | ) | ||||||||||||||
4
CORPORATION
For the Six Months Ended June 30, 2022 | For the Six Months Ended June 30, 2021 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net income | $ | 10,132,867 | $ | 12,111,070 | ||||
Adjustments to reconcile net income to net cash used in operating activities: | ||||||||
Payment of formation costs through issuance of Class B ordinary shares | ||||||||
Interest earned on investment held in Trust Account | (622,447 | ) | (10,717 | ) | ||||
Change in fair value of FPA | 530,554 | 241,321 | ||||||
Change in fair value of warrant liabilities | (12,734,196 | ) | (14,964,352 | ) | ||||
Change in fair value of convertible promissory note | 4,923 | — | ||||||
Transaction costs allocable to warrant liabilities | — | 2,092,043 | ||||||
Changes in operating assets and liabilities: | ||||||||
Prepaid expenses | (270,437 | ) | (258,529 | ) | ||||
Accrued expenses | 2,023,686 | 237,207 | ||||||
Accrued offering costs | — | (326,235 | ) | |||||
Due to related party | 60,000 | 50,000 | ||||||
Net cash used in operating activities | (875,050 | ) | (828,192 | ) | ||||
Cash Flows from Investing Activities: | ||||||||
Investment of cash held in Trust Account | 0— | (414,000,000 | ) | |||||
Net cash used in investing activities | 0— | (414,000,000 | ) | |||||
Cash Flows from Financing Activities: | ||||||||
Proceeds from sale of Units, net of underwriting discounts paid | 0— | 405,720,000 | ||||||
Proceeds from sale of Private Placement Warrants | 0— | 10,280,000 | ||||||
Proceeds from the convertible promissory note - related party | 500,000 | 0— | ||||||
Repayment of Sponsor loan | 0— | (191,819 | ) | |||||
Payment of offering costs | 0— | (139,169 | ) | |||||
Net cash provided by financing activities | 500,000 | 415,669,012 | ||||||
Net Change in Cash | (375,050 | ) | 840,820 | |||||
Cash – Beginning of period | 497,619 | 100 | ||||||
Cash – End of period | $ | 122,569 | $ | 840,920 | ||||
Non-Cash investing and financing activities: | ||||||||
Offering costs paid through promissory note | $ | 0— | $ | 62,825 | ||||
Change in value of Class A ordinary shares subject to possible redemption | $ | — | $ | 26,066,830 | ||||
Initial classification of Class A ordinary shares subject to possible redemption | $ | — | $ | 414,000,000 | ||||
Deferred underwriting commissions charged to additional paid-in capital | $ | 0— | $ | 14,490,000 | ||||
MARCH 31, 2021
AND GOING CONCERN
5
PRIMAVERA CAPITAL ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
The Company will proceedproceeded with a Business Combination only if the Company has net tangible assets of at least $5,000,001 and, if the Company seeks shareholder approval, it receives an ordinary resolution under Cayman Islands law approving a Business Combination, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the Company. If a shareholder vote is not required and the Company does not decide to hold a shareholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Memorandum and Articles of Association, conduct the redemptions pursuant to the tender offer rules of the Securities and Exchange Commission (“SEC”), and file tender offer documents containing substantially the same information as would be included in a proxy statement with the SEC prior to completing a Business Combination. If the Company seeks shareholder approval in connection with a Business Combination, the Sponsor has agreed to vote the Founder Shares it will receive (as defined in Note 5) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each Public Shareholder may elect to redeem their Public Shares, without voting, and if they do vote, irrespective of whether they vote for or against a proposed Business Combination.
6
CORPORATION
MARCH 31, 2021
NOTE 2 — REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENT
The
Upon reviewterms of the “Staff StatementCompany’s memorandum and articles of association) or (ii) the date on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (SPACs)” promulgated bywhich the SEC on April 12, 2021,Company consummates a Business Combination (see Note 5).
As a result of the above,Business Combination. Moreover, the Company will now classifyneed to raise additional capital through loans from its Sponsor, officers, directors, or third parties. None of the Warrants and FPA as derivative liabilitiesSponsor, officers or directors are under any obligation to advance funds to, or to invest in, its previously issued financial statement as of January 26, 2021. Under this accounting treatment,the Company. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. In addition, if the Company is not able to consummate a Business Combination before January 26, 2023, the Company will commence an automatic winding up, dissolution and liquidation. Management has determined that the liquidity condition and automatic liquidation, should a Business Combination not occur, and potential subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to measure the fair value of the Warrants and FPA at the end of each reporting period and recognize changes in the fair value from the prior period in the Company’s operating results for the current period.
The Company’s accounting for the Warrants and FPA as components of equity instead of as derivative liabilities did not have any effect on the Company’s previously reported investments held in trust or cash.
The table below summarizes the effects of the revision of the financial statement as ofliquidate after January 26, 2021:
As | ||||||||||||
Previously | As | |||||||||||
Reported | Adjustments | Revised | ||||||||||
Balance sheet as of January 26, 2021 (audited) | ||||||||||||
Warrant Liabilities | $ | — | $ | 54,821,479 | $ | 54,821,479 | ||||||
FPA Liability | — | 3,752,168 | 3,752,168 | |||||||||
Class A Ordinary Shares Subject to Possible Redemption | 395,845,870 | (58,573,650 | ) | 337,272,220 | ||||||||
Class A Ordinary Shares | 182 | 585 | 767 | |||||||||
Additional Paid-in Capital | 5,003,590 | 13,955,177 | 18,958,767 | |||||||||
Accumulated Deficit | (5,000 | ) | (13,955,759 | ) | (13,960,759 | ) | ||||||
Total Shareholders’ Equity | 5,000,007 | 3 | 5,000,010 |
7
CORPORATION
MARCH 31, 2021
2021.
Warrantsheets.
adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. As of June 30, 2022 and December 31, 2021, there were $646,746 and $0 change to the redemption value of the Class A ordinary shares, respectively.
Gross proceeds | $ | 414,000,000 | ||
Less: Proceeds allocated to Public Warrants | (36,429,930 | ) | ||
Less: Class A ordinary shares issuance costs | (21,362,080 | ) | ||
Add: Accretion of carrying value to redemption value | 57,792,010 | |||
Add: Remeasurement on Class A ordinary shares subject to possible redemption | 646,746 | |||
Class A ordinary shares subject to possible redemption | $ | 414,646,746 | ||
8
CORPORATION
MARCH 31, 2021
Net
The Company’s condensed statement of operations includes a presentation of income per ordinary share for ordinary shares subjectthe periods. The table below presents a reconciliation of the numerator and denominator used to possible redemption in a manner similar to the two-class method of income per share. Net income per ordinary share, basic and diluted, for Class A redeemable ordinary shares is calculated by dividing the interest income earned on the Trust Account, by the weighted average number of Class A redeemable ordinary shares outstanding since original issuance. Net income per ordinary share, basic and diluted, for Class B non-redeemable ordinary shares is calculated by dividing the net income, adjusted for income attributable to Class A redeemable ordinary shares, by the weighted average number of Class B non-redeemable ordinary shares outstanding for the period. Class B non-redeemable ordinary shares includes the Founder Shares as these shares do not have any redemption features and do not participate in the income earned on the Trust Account.
The following table reflects the calculation ofcompute basic and diluted net income per share for each class of ordinary share (in dollars, except per share amounts):
Three Months Ended March 31, | ||||
2021 | ||||
Redeemable Class A Ordinary Shares | ||||
Numerator: Earnings allocable to Redeemable Class A Ordinary Shares | ||||
Interest Income | $ | 4,425 | ||
Net Earnings | $ | 4,425 | ||
Denominator: Weighted Average Redeemable Class A Ordinary Shares | ||||
Redeemable Class A Ordinary Shares, Basic and Diluted | 41,400,000 | |||
Income/Basic and Diluted Redeemable Class A Ordinary Shares | $ | 0.00 | ||
Non-Redeemable Class A and B Ordinary Shares | ||||
Numerator: Net Income minus Redeemable Net Earnings | ||||
Net Income | $ | 18,430,219 | ||
Redeemable Net Earnings | (4,425 | ) | ||
Non-Redeemable Net Income | $ | 18,425,794 | ||
Denominator: Weighted Average Non-Redeemable Class A and B Ordinary Shares | ||||
Non-Redeemable Class A and B Ordinary Shares, Basic and Diluted (1) | 11,960,000 | |||
Income/Basic and Diluted Non-Redeemable Class A and B Ordinary Shares | $ | 1.54 |
Note: As of March 31, 2021, basic and diluted shares are the same as there are no non-redeemable securities that are dilutive to the Company’s shareholders.
shares:
For the Three Months Ended June 30, 2022 | For the Three Months Ended June 30, 2021 | |||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||
Basic and diluted net income (loss) per share | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of net income (loss) | $ | 7,583,889 | $ | 2,262,344 | $ | (4,867,214 | ) | $ | (1,451,935 | ) | ||||||
Denominator | ||||||||||||||||
Weighted -average shares outstanding | 41,400,000 | 12,350,000 | 41,400,000 | 12,350,000 | ||||||||||||
Basic and diluted net income (loss) per share | $ | 0.18 | $ | 0.18 | $ | (0.12 | ) | $ | (0.12 | ) |
For the Six Months Ended June 30, 2022 | For the Six Months Ended June 30, 2021 | |||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||
Basic and diluted net income per share | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of net income | $ | 7,804,664 | $ | 2,328,203 | $ | 9,018,740 | $ | 3,092,330 | ||||||||
Denominator | ||||||||||||||||
Weighted -average shares outstanding | 41,400,000 | 12,350,000 | 41,400,000 | 12,156,077 | ||||||||||||
Basic and diluted net income per share | $ | 0.19 | $ | 0.19 | $ | 0.25 | $ | 0.25 |
9
PRIMAVERA CAPITAL ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2022 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company adopted ASU 2020-06 effective January 1, 2021. The adoption of ASU 2020-06 did not have an impact on the Company’s financial statements.
10
PRIMAVERA CAPITAL ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
sheets.
Related Party
As of June 30, 2022 and December 31, 2021, the Company recognized $250,000 in fees for these services, of which $250,000 is included in accrued expenses in the accompanying condensed balance sheets.
11
PRIMAVERA CAPITAL ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
DEFICIT
Class
Holders of Class A ordinary shares and Class B ordinary shares will vote together as a single class on all matters submitted to a vote of shareholders, except as required by law.
12
CORPORATION
MARCH 31, 2021
13
CORPORATION
MARCH 31, 2021
Level 1: | Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. |
Level 2: | Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. |
Level 3: | Unobservable inputs based on |
Description | Level | March 31, 2021 | ||||||
Assets: | ||||||||
Investments held in Trust Account – U.S. Treasury Securities Money Market Fund | 1 | $ | 414,004,425 | |||||
Liabilities: | ||||||||
Warrant Liability – Public Warrants | 1 | 16,974,000 | ||||||
Warrant Liability – Private Placement Warrants | 3 | 8,444,591 | ||||||
FPA Liability | 3 | 88,302 |
Level | June 30, 2022 | December 31, 2021 | ||||||||||
Assets: | ||||||||||||
Investments held in Trust Account – U.S. Treasury Securities Money Market Funds | 1 | $ | 414,646,746 | $ | 414,024,299 | |||||||
FPA Asset | 3 | $ | 42,274 | $ | 572,828 | |||||||
Liabilities: | ||||||||||||
Warrant Liability – Public Warrants | 1 | $ | 3,312,000 | $ | 13,869,000 | |||||||
Warrant Liability – Private Placement Warrants | 3 | $ | 4,833,644 | $ | 7,010,840 | |||||||
Convertible promissory note – related party | 3 | $ | 504,923 | $ | 0— |
14
PRIMAVERA CAPITAL ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
January 26, 2021 (Initial measurement) | March 31, 2021 | |||||||
Unit price | $ | 10.90 | $ | 9.80 | ||||
Term to initial business combination (in years) | 1.0 | 0.9 | ||||||
Volatility | 10.0 | % | 10.0 | % | ||||
Risk-free rate | 0.58 | % | 1.14 | % | ||||
Dividend yield | 0.0 | % | 0.0 | % |
January 26, 2021 (Initial measurement) | December 31, 2021 | June 30, 2022 | ||||||||||
Unit price | $ | 10.90 | $ | 9.71 | $ | 9.83 | ||||||
Term to initial Business Combination (in years) | 1.0 | 0.53 | 0.50 | |||||||||
Volatility | 10.0 | % | 11.6 | % | 4.6 | % | ||||||
Risk-free rate | 0.58 | % | 1.31 | % | 3.02 | % | ||||||
Dividend yield | 0.0 | % | 0.0 | % | 0.0 | % |
Private Placement | Public | Total Warrant Liabilities | ||||||||||
Fair value as of January 1, 2021 | $ | — | $ | — | $ | — | ||||||
Initial measurement on January 26, 2021 | 18,391,549 | 36,429,930 | 54,821,479 | |||||||||
Transfer to Level 1 | — | (36,429,930 | ) | (36,429,930 | ) | |||||||
Change in fair value | (9,946,958 | ) | — | (9,946,958 | ) | |||||||
Fair value as of March 31, 2021 | $ | 8,444,591 | $ | — | $ | 8,444,591 | ||||||
liabilities for the six months ended June 30, 2022 and 2021:
Private Placement | Public | Total Warrant Liabilities | ||||||||||
Fair value as of January 1, 2022 | $ | 7,010,840 | $ | — | $ | 7,010,840 | ||||||
Change in fair value-Private Warrants | (2,177,196 | ) | — | (2,177,196 | ) | |||||||
Fair value as of June 30, 2022 | $ | 4,833,644 | $ | — | $ | 4,833,644 | ||||||
Private Placement | Public | Total Warrant Liabilities | ||||||||||
Fair value as of January 1, 2021 | $ | — | $ | — | $ | — | ||||||
Initial measurement on January 26, 2021 | 18,391,549 | 36,429,930 | 54,821,479 | |||||||||
Transfer to Level 1 | — | (36,429,930 | ) | (36,429,930 | ) | |||||||
Change in fair value-Private Warrants | (7,759,971 | ) | — | (7,759,971 | ) | |||||||
Fair value as of June 30, 2021 | $ | 10,631,578 | $ | — | $ | 10,631,578 | ||||||
Private Placement | ||||
Fair value as of January 1, 2021 | $ | — | ||
Initial measurement on January 26, 2021 | 3,752,168 | |||
Change in fair value | (3,663,866 | ) | ||
Fair value as of March 31, 2021 | $ | 88,302 |
Transfers to/from Levels 1, 2liability (asset) for the six months ended June 30, 2022 and 2021:
Forward Purchase Units | ||||
Fair value as of January 1, 2022 | $ | (572,828 | ) | |
Change in fair value | 175,771 | |||
Fair value as of March 31, 2022 | (397,057 | ) | ||
Change in fair value | 354,783 | |||
Fair value as of June 30, 2022 | $ | (42,274 | ) |
Forward Purchase Units | ||||
Fair value as of January 1, 2021 | $ | 0— | ||
Initial measurement on January 26, 2021 | 3,752,168 | |||
Change in fair value | (3,663,866 | ) | ||
Fair value as of March 31, 2021 | 88,302 | |||
Change in fair value | 153,019 | |||
Fair value as of June 30, 2021 | $ | 241,321 |
June 30, 2022 | February 14, 2022 | |||||||
Stock price | $ | 9.83 | $ | 9.76 | ||||
Weighted time to conversion (in years) | 5.03 | 5.46 | ||||||
Volatility | 16.3 | % | 7.5 | % | ||||
Risk-free rate | 1.28 | % | 1.92 | % |
Convertible Promissory Note | ||||
Fair value as of January 1, 2022 | $ | 0— | ||
Proceeds received through Convertible Promissory Note on February 14, 2022 | 500,000 | |||
Change in fair value | 4,923 | |||
Fair value as of June 30, 2022 | $ | 504,923 |
15
PRIMAVERA CAPITAL ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
16
within the allotted period.
Liquidity and Capital Resources
On January 26,$153,019.
Following the Initial Public Offering, the full exercise of the over-allotment option, and the sale of the Private Placement Warrants, a total of $414,000,000 was placed in the Trust Account. We incurred $23,454,123 in Initial Public Offering related costs, consisting of $8,280,000 of underwriting fees, $14,490,000 of deferred underwriting fees and $684,123 of other offering costs.
For the three months ended March 31, 2021, cash used in operating activities was $840,033. Netnet income of $18,430,219 was affected by interest earned on marketable securities held in Trust Account$12,111,070, which consists of $4,425, a change in fair value of warrant liabilities of $21,291,339,$14,964,352 and interest earned on investment held in the Trust Account of $10,717, offset by general and administrative expenses of $530,635, offering costs allocable to warrants of $2,092,043 and a change in fair value of FPA of $88,302, and transaction costs allocable to warrants of $2,092,043. Changes in operating assets and liabilities used $154,833 of cash for operating activities.
17
As of March 31, 2021, we had investments held in the Trust Account of $414,004,425 (including approximately $4,425 of interest income) consisting money market funds which invest primarily in U.S. Treasury Bills with a maturity of 185 days or less. We may withdraw interest from the Trust Account to pay taxes, if any. We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less income taxes payable), to complete our Business Combination. To the extent that our share capital or debt is used, in whole or in part, as consideration to complete our Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
As of March 31, 2021, we had cash of $867,295. We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a Business Combination.
In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Sponsor, or certain of our officers and directors or their affiliates may, but are not obligated to, loan us funds as may be required. If we complete a Business Combination, we would repay such loaned amounts. In the event that a Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000 of notes may be converted upon completion of a Business Combination into warrants at a price of $1.00 per warrant. Such warrants would be identical to the Private Placement Warrants.
We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our Business Combination. Moreover, we may need to obtain additional financing either to complete our Business Combination or because we become obligated to redeem a significant number of our Public Shares upon consummation of our Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination.
Off-Balance Sheet Arrangements
We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of March 31, 2021. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.
Obligations
On August 24, 2020, we entered into a fee arrangement with Ms. Zhang pursuant to which, in consideration for her services as an independent director and her expertise to source and/or evaluate potential acquisition targets, we will pay Ms. Zhang a fee in the aggregate amount
Under the supervision and Our management evaluated, with the participation of our management, including our principalcurrent chief executive officer and principalchief financial and accounting officer we conducted an evaluation of(our “Certifying Officers”), the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended March 31, 2021, as such term is defined in Rules 13a-15(e) and 15d-15(e) June 30, 2022, pursuant to Rule
all potential future conditions.
During the quarter ended March 31, 2021, there has been
On January 26, 2021, we consummated the Initial Public Offering of 41,400,000 Units. The Units were sold at an offering price of $10.00 per unit, generating total gross proceeds of $414,000,000. Credit Suisse Securities (USA) LLC and Citigroup Global Markets Inc. acted as joint book-running manager of the Initial Public Offering. The securities in the offering were registered under the Securities Act on registration statement on Form S-1 (No. 333-251917). The Securities and Exchange Commission declared the registration statements effective on January 21, 2021.Simultaneous with the consummation of the Initial Public Offering, the Sponsor consummated the private placement of an aggregate of 10,280,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant, generating total proceeds of $10,280,000. Each whole Public Warrant entitles the holder to purchase one Class A ordinary share at an exercise price of $11.50 per whole share. The issuance was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.The Private Warrants are identical to the warrants underlying the Units sold in the Initial Public Offering, except that the Private Warrants are not transferable, assignable or salable until after the completion of a Business Combination, subject to certain limited exceptions.Of the gross proceeds received from the Initial Public Offering, the exercise of the over-allotment option and the Private Placement Warrants, an aggregate of $414,000,000 was placed in the Trust Account.We paid a total of $8,280,000 in underwriting discounts and commissions and $684,123 for other costs and expenses related to the Initial Public Offering. In addition, the underwriters agreed to defer $14,490,000 in underwriting discounts and commissions.For a description of the use of the proceeds generated in our Initial Public Offering, see Part I, Item 2 of this Form 10-Q. 20
104* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* | Filed herewith. |
** | Furnished herewith. |
21
PRIMAVERA CAPITAL ACQUISITION | ||||||
Date: | By: | /s/ Tong Chen | ||||
Name: | Tong Chen | |||||
Title: | Chief Executive Officer and Chief Financial Officer | |||||
(Principal Executive Officer and Principal Financial and Accounting Officer) |