(Amendment No.1)
☒ | 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 |
CORPORATIONCORP. incorporation or organization)
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Class A ordinary shares, par value $0.0001 per share | PV | The New York Stock Exchange | ||
Redeemable warrants, each whole warrant exercisable for one Class A ordinary share at an exercise price of $11.50 | PV WS | The New York Stock Exchange | ||
Units, each consisting of one Class A ordinary share and one-half of one redeemable warrant | PV.U | The New York Stock Exchange | ||
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||
Emerging growth company | ☒ |
Explanatory Note
Except for the foregoing, no other changes have been made to the Form 10-Q. This Amendment No. 1 to the Form 10-Q speaks as of the original filing date of the Form 10-Q, does not reflect events that may have occurred subsequent to the original filing date, and does not modify or update in any way disclosures made in the original Form 10-Q.
Pursuant to Rule 406T of Regulation S-T , the interactive data files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.
CORPORATION
2022
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CORPORATION
March 31, 2021 | December 31, 2020 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash | $ | 867,295 | $ | 100 | ||||
Prepaid expenses | 359,000 | — | ||||||
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Total Current Assets | 1,226,295 | 100 | ||||||
Deferred offering costs | — | 482,129 | ||||||
Investment held in Trust Account | 414,004,425 | — | ||||||
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TOTAL ASSETS | $ | 415,230,720 | $ | 482,229 | ||||
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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 | ||||||
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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 | — | ||||||
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Total Liabilities | 40,572,511 | 462,229 | ||||||
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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 | ) | |||||
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Total Shareholders’ Equity | 5,000,009 | 20,000 | ||||||
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TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 415,230,720 | $ | 482,229 | ||||
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March 31, 2022 | December 31, 2021 | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash | $ | 708,909 | $ | 497,619 | ||||
Prepaid expenses | 71,511 | 25,984 | ||||||
Total Current Assets | 780,420 | 523,603 | ||||||
Forward Purchase Agreement (FPA) asset | 397,057 | 572,828 | ||||||
Investment held in Trust Account | 414,058,718 | 414,024,299 | ||||||
TOTAL ASSETS | $ | 415,236,195 | $ | 415,120,730 | ||||
LIABILITIES AND SHAREHOLDERS’ DEFICIT | ||||||||
Current liabilities | ||||||||
Accrued expenses | $ | 3,886,476 | $ | 2,526,858 | ||||
Due to related party | 140,000 | 110,000 | ||||||
Promissory note—related party | 7,000 | 7,000 | ||||||
Convertible promissory note | 500,178 | 0 | ||||||
Total Current Liabilities | 4,533,654 | 2,643,858 | ||||||
Warrant liabilities | 18,818,875 | 20,879,840 | ||||||
Deferred underwriting fee payable | 14,490,000 | 14,490,000 | ||||||
Total Liabilities | 37,842,529 | 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 $10.00 per share redemption value as of March 31, 2022 and December 31, 2021 | 414,000,000 | 414,000,000 | ||||||
Shareholders’ Deficit | ||||||||
Preference shares, $0.0001 par value; 1,000,000 shares authorized; 0 shares issued or outstanding | 0 | 0 | ||||||
Class B non-redeemable ordinary shares, $0.0001 par value; 40,000,000 shares authorized; 12,350,000 shares issuedand outstanding at March 31, 2022 and December 31, 2021 | 1,235 | 1,235 | ||||||
Additional paid-in capital | 0 | 0 | ||||||
Accumulated deficit | (36,607,569 | ) | (36,894,203 | ) | ||||
Total Shareholders’ Deficit | (36,606,334 | ) | (36,892,968 | ) | ||||
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT | $ | 415,236,195 | $ | 415,120,730 | ||||
CORPORATION
THREE MONTHS ENDED MARCH 31, 2021
General and administrative expenses | $ | 685,200 | ||
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Loss from operations | (685,200 | ) | ||
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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 | |||
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Other income, net | 19,115,419 | |||
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Net income | $ | 18,430,219 | ||
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Weighted average shares outstanding, Class A redeemable ordinary shares | 41,400,000 | |||
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Basic and diluted net income per share, Class A redeemable ordinary shares | $ | 0.00 | ||
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Weighted average shares outstanding, Class B non-redeemable ordinary shares | 11,960,000 | |||
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Basic and diluted net income per share, Class B non-redeemable ordinary shares | $ | 1.54 | ||
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For the Three Months Ended March 31, 2022 | For the Three Months Ended March 31, 2021 | |||||||
General and administrative expenses | $ | 1,632,801 | $ | 685,200 | ||||
Loss from operations | (1,632,801 | ) | (685,200 | ) | ||||
Other income (expense) | ||||||||
Change in fair value of FPA | (175,771 | ) | (88,302 | ) | ||||
Change in fair value of warrant liabilities | 2,060,965 | 21,291,339 | ||||||
Transaction costs allocable to warrant liabilities | — | (2,092,043 | ) | |||||
Change in fair value of convertible promissory note | (178 | ) | — | |||||
Interest earned on investment held in Trust Account | 34,419 | 4,425 | ||||||
Total Other income (expense), net | $ | 1,919,435 | $ | 19,115,419 | ||||
Net income | $ | 286,634 | $ | 18,430,219 | ||||
Weighted average shares outstanding, Class A redeemable ordinary shares | 41,400,000 | 29,440,000 | ||||||
Basic and diluted net income per share, Class A redeemable ordinary shares | $ | 0.01 | $ | 0.45 | ||||
Weighted average shares outstanding, Class B non-redeemable ordinary shares | 12,350,000 | 11,960,000 | ||||||
Basic and diluted net income per share, Class B non-redeemable ordinary shares | $ | 0.01 | $ | 0.45 | ||||
CORPORATION
DEFICIT
2022
Class A Ordinary Shares | Class B Ordinary Shares | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Total Shareholders’ Equity | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
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 | |||||||||||||||||||||
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Balance – March 31, 2021 | 4,434,180 | $ | 443 | 12,350,000 | $ | 1,235 | $ | — | $ | 4,998,331 | $ | 5,000,009 | ||||||||||||||||
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Class A | Class B | Total | ||||||||||||||||||||||||||
Ordinary Share | Ordinary Share | Additional | Accumulated | Shareholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Paid-In Capital | Deficit | Deficit | ||||||||||||||||||||||
Balance as of January 1, 2022 | 0 | $ | 0 | 12,350,000 | $ | 1,235 | $ | 0 | $ | (36,894,203 | ) | $ | (36,892,968 | ) | ||||||||||||||
Net incom e | — | 0 | — | 0 | 0 | 286,634 | 286,634 | |||||||||||||||||||||
Balance as of March 31, 2022 | 0 | $ | 0 | 12,350,000 | $ | 1,235 | $ | 0 | $ | (36,607,569 | ) | $ | (36,606,334 | ) | ||||||||||||||
CORPORATION
CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)
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Class A | Class B | Total | ||||||||||||||||||||||||||
Ordinary Share | Ordinary Share | Additional | Accumulated | Shareholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Paid-In Capital | Deficit | Equity (Deficit) | ||||||||||||||||||||||
Balance as of January 1, 2021 | 0 | $ | 0 | 12,350,000 | $ | 1,235 | $ | 23,765 | $ | (5,000 | ) | $ | 20,000 | |||||||||||||||
Accretion of Class A ordinary shares to redemption amount | — | 0 | — | 0 | (23,765 | ) | (57,768,245 | ) | (57,792,010 | ) | ||||||||||||||||||
Net income | — | 0 | — | 0 | 0 | 18,430,219 | 18,430,219 | |||||||||||||||||||||
Balance as of March 31, 2021 | 0 | $ | 0 | 12,350,000 | $ | 1,235 | $ | 0 | $ | (39,343,026 | ) | $ | (39,341,791 | ) | ||||||||||||||
CORPORATION
For the Three Months Ended March 31, 2022 | For the Three Months Ended March 31, 2021 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net income | $ | 286,634 | $ | 18,430,219 | ||||
Adjustments to reconcile net income to net cash used in operating activities: | ||||||||
Payment of formation costs through issuance of Class B ordinary shares | 0 | 0 | ||||||
Interest earned on investment held in Trust Account | (34,419 | ) | (4,425 | ) | ||||
Change in fair value of FPA | 175,771 | 88,302 | ||||||
Change in fair value of warrant liabilities | (2,060,965 | ) | (21,291,339 | ) | ||||
Change in fair value of convertible promissory note | 178 | 0 | ||||||
Transaction costs allocable to warrant liabilities | 0 | 2,092,043 | ||||||
Changes in operating assets and liabilities: | ||||||||
Prepaid expenses | (45,527 | ) | (359,000 | ) | ||||
Accrued expense s | 1,359,618 | 204,167 | ||||||
Due to related party | 30,000 | 0 — | ||||||
Net cash used in operating activities | (288,710 | ) | (840,033 | ) | ||||
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— | (100,953 | ) | |||||
Net cash provided by financing activities | 500,000 | 415,707,228 | ||||||
Net Change in Cash | 211,290 | 867,195 | ||||||
Cash – Beginning of period | 497,619 | 100 | ||||||
Cash – End of period | $ | 708,909 | $ | 867,295 | ||||
Non-Cash investing and financing activities: | ||||||||
Offering costs paid through promissory note | $ | 0— | $ | 62,825 | ||||
Offering costs included in accrued offering costs | $ | 0— | $ | 38,216 | ||||
Deferred underwriting commissions charged to additional paid in capital | $ | 0— | $ | 14,490,000 | ||||
2022
AND GOING CONCERN
5
CORPORATION
2022
6
CORPORATION
2022
NOTE 2 — REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENT
The Company previously accounted for its outstanding Public Warrants (as defined in Note 5) and Private Placement Warrants (collectively, with the Public Warrants, the “Warrants”) issued in connection with its Initial Public Offering and its forward purchase agreements (“forward purchase agreements” or “FPA”) as components of equity instead of as derivative liabilities.
Upon review of the “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (SPACs)” promulgated by the SEC on April 12, 2021, the Company’s management further evaluated the Warrants and FPA under Accounting Standards Codification (“ASC”) Subtopic 815-40, Contracts in Entity’s Own Equity and concluded that they do not meet the criteria to be classified in shareholders’ equity.
As a result of the above, the Company will now classify the Warrants and FPA as derivative liabilities in its previously issued financial statement as of January 26, 2021. Under this accounting treatment, the Company is 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 of January 26, 2021:
As Previously Reported | Adjustments | As 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
PRIMAVERA CAPITAL ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
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 Exchange Act) 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
2021.
Warrantsheets.
adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. As of March 31, 2022 and December 31, 2021 there was no change to the redemption value of the Class A ordinary shares.
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 | |||
Class A ordinary shares subject to possible redemption | $ | 414,000,000 | ||
8
PRIMAVERA CAPITAL ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
The Company is considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero0 for the periodperiods presented.
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 | ||
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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 | ) | ||
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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 March 31, 2022 | For the Three Months Ended March 31, 2021 | |||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||
Basic and diluted net income per share | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of net income | $ | 220,775 | $ | 65,859 | $ | 13,105,934 | $ | 5,324,285 | ||||||||
Denominator | ||||||||||||||||
Weighted-average shares outstanding | 41,400,000 | 12,350,000 | 29,440,000 | 11,960,000 | ||||||||||||
Basic and diluted net income per share | $ | 0.01 | $ | 0.01 | $ | 0.45 | $ | 0.45 |
9
CORPORATION
2022
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.
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. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
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
PRIMAVERA CAPITAL ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
The Company has agreed that as soon as practicable, but in no event later than 15 business days, after the closing of a Business Combination, it will use its commercially reasonable efforts to file with the SEC a registration statement covering the issuance, under the Securities Act, of the Class A ordinary shares issuable upon exercise of the warrants. The Company will use its commercially reasonable efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement. If a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective by the sixtieth (60th) business day after the closing of a 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 Class A ordinary shares are, at the time of any exercise of a warrant, not listed on a national securities exchange such that they satisfy 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 use its commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
13
PRIMAVERA CAPITAL ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2021
(Unaudited)
In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of its Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) 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 price 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.
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 |
Description | Level | March 31, 2022 | December 31, 2021 | |||||||||
Assets: | ||||||||||||
Investments held in Trust Account – U.S. Treasury Securities Money Market Funds | 1 | $ | 414,058,718 | $ | 414,024,299 | |||||||
FPA Asset | 3 | $ | 397,057 | $ | 572,828 | |||||||
Liabilities: | ||||||||||||
Warrant Liability – Public Warrants | 1 | $ | 8,280,000 | $ | 13,869,000 | |||||||
Warrant Liability – Private Placement Warrants | 3 | $ | 10,538,875 | $ | 7,010,840 | |||||||
Convertible promissory note – related party | 3 | $ | 500,178 | $ | 0 — |
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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 | March 31, 2022 | ||||||||||
Unit price | $ | 10.90 | $ | 9.71 | $ | 9.83 | ||||||
Term to initial Business Combination (in years) | 1.0 | 0.53 | 0.75 | |||||||||
Volatility | 10.0 | % | 11.6 | % | 12.0 | % | ||||||
Risk-free rate | 0.58 | % | 1.31 | % | 2.41 | % | ||||||
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 | ) | |||||||
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Fair value as of March 31, 2021 | $ | 8,444,591 | $ | — | $ | 8,444,591 | ||||||
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liabilities for the three months ended March 31, 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 | 3,528,035 | — | 3,528,035 | |||||||||
Fair value as of March 31, 2022 | $ | 10,538,875 | $ | — | $ | 10,538,875 |
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 | (9,946,958 | ) | — | (9,946,958 | ) | |||||||
Fair value as of March 31, 2021 | $ | 8,444,591 | $ | — | $ | 8,444,591 |
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 | ) | ||
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Fair value as of March 31, 2021 | $ | 88,302 | ||
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PRIMAVERA CAPITAL ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCHliability (asset) for the three months ended March 31, 2021
(Unaudited)
Transfers to/from Levels 1, 22022 and 3 are recognized at the end2021 :
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 | ) |
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 |
March 31, 2022 | February 14, 2022 | |||||||
Stock price | $ | 9.83 | $ | 9.76 | ||||
Weighted time to conversion (in years) | 5.21 | 5.46 | ||||||
Volatility | 7.3 | % | 7.5 | % | ||||
Risk-free rate | 2.42 | % | 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 | 178 | |||
Fair value as of March 31, 2022 | $ | 500,178 |
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Liquidity and Capital Resources
On January 26, 2021, we consummated the Initial Public Offering of 41,400,000 Units, which includes a full exercise by the underwriters of their over-allotment option in the amount of 5,400,000 Units, at $10.00 per Unit, generating gross proceeds of $414,000,000. Simultaneously with the closing of the Initial Public Offering, we consummated the sale of 10,280,000 Private Placement Warrant at a price of $1.00 per Private Placement Warrant in a private placement to Sponsor, generating gross proceeds of $10,280,000.
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. Net income of $18,430,219 was affected by interest earned on marketable securities held in Trust Account of $4,425, a change in fair value of warrant liabilities of $21,291,339, 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.
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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 of $250,000, which is payable upon the closing of the Business Combination.
Certain accredited investors (the “anchor investors”) have entered into forward purchase agreements which provide for the purchase by the anchor investors of an aggregate of 8,000,000 Class A ordinary shares, plus an aggregate of 2,000,000 redeemable warrants to purchase one Class A ordinary share at $11.50 per share, for an aggregate purchase price of $80,000,000, or $10.00 per Class A ordinary share, in a private placement to close concurrently with the closing of a Business Combination. The proceeds from the sale of forward purchase shares may be used as part of the consideration to the sellers in a Business Combination, expenses in connection with a Business Combination or for working capital in the post-transaction company. These purchases will be made regardless of whether any Class A ordinary shares are redeemed by the Public Shareholders and are intended to provide us with a minimum funding level for a Business Combination. The anchor investors will not have the ability to approve a Business Combination prior to the signing of a material definitive agreement and, if we seek shareholder approval, have agreed to vote their Founder Shares and any Public Shares held by them in favor of a Business Combination. The forward purchase securities will be issued only in connection with the closing of a Business Combination.
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and Estimates
Hedging”. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then
Recent Accounting Standards
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 featureswere excluded 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, includingbecause the requirement to usewarrants are contingently exercisable and the if-converted methodcontingencies have not yet been met. As a result, diluted net income per common share is the same as basic net loss per common share 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. We adopted ASU 2020-06 effective January 1, 2021. The adoption of ASU 2020-06 did not have an impact on our financial statements.
the periods.
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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)2022, pursuant to Rule 13a-15(b) under the Exchange Act. Based on thisupon their evaluation, our principal executive officer and principal financial and accounting officer haveCertifying Officers concluded that during the period covered by this report, our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective due to a material weakness in internal controls over financial reporting related to inaccurate accounting for warrants issued in connection with our Initial Public Offering and private placement and our FPA. To address this material weakness, management has devoted, and plans to continue to devote, significant effort and resources to the remediation and improvement of its internal control over financial reporting. While we have processes to identify and appropriately apply applicable accounting requirements, we plan to enhance these processes to better evaluate its research and understanding of the nuances of the complex accounting standards that apply to its financial statements. We plan to include providing enhanced access to accounting literature, research materials and documents and increased communication among its personnel and third-party professionals with whom it consults regarding complex accounting applications. The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects. Other than this issue, our disclosure controls and procedures were not effective at a reasonable assurance level and, accordingly, provided reasonable assurance that the information required to be disclosed by us in reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
Changes in Internal Control over Financial Reporting
During the quarter endedas of March 31, 2021, there has been no change2022, due to the material weakness in our internal control over financial reporting related to complex financial instruments. In light of this material weakness, we performed additional analysis as deemed necessary to ensure that hasour audited financial statements were prepared in accordance with U.S. generally accepted accounting principles. Accordingly, management believes that the financial statements included in this Quarterly Report on Form 10-Q present fairly in all material respects our financial position, results of operations and cash flows for the period presented.
Simultaneous
commissions, which will be paid upon the consummation of our initial Business Combination.
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* | Filed herewith. |
** |
Furnished herewith. |
26 SIGNATURE Pursuant to |
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In accordance with the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: May 13, 2022 | PRIMAVERA CAPITAL ACQUISITION CORPORATION | |||||
By: | /s/ Tong Chen | |||||
Name: | Tong Chen | |||||
Title: | Chief Executive Officer and Chief Financial Officer (Principal Executive Officer and Principal Financial and Accounting Officer) |
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