☒ 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 | ||
Delaware | 001-39784 | 85-3046972 | ||
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification Number) |
667 Madison Avenue, 15th Floor New York, New York | ||
(Address of principal executive offices) | (Zip Code) |
Title of Each Class: | Trading Symbol: | Name of Each Exchange on Which Registered: | ||
CAPS TM , each consisting of one share of Class A common stock andone-fourth of one redeemable warrant | PCPC.U | The New York Stock Exchange | ||
Class A common stock, par value $0.0001 per share | PCPC | The New York Stock Exchange | ||
Redeemable warrants, each whole warrant exercisable for one share of Class A common stock at an exercise price of $28.75 per share | PCPC WS | The New York Stock Exchange |
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||
| Emerging growth company | ☒ | |||||
PERIPHAS CAPITAL PARTNERING CORPORATION
September 30, 2021, as filed with the Securities and Exchange Commission (“SEC”) on November 12, 2021.
Table of Previously Issued Financial Statements, (“Note 1”) that describes a revision to the Company’s classification of its Class A common stock subject to possible redemption (the “Public Shares”) issued as part of the units sold in the Company’s initial public offering (“IPO”) on December 14, 2020. As described in Note 1, historically, a portion of the Public Shares were classified as permanent equity to maintain stockholders’ equity greater than $5 million on the basis that the Company may not redeem its Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001, as described in the Company’s amended and restated certificate of incorporation. Pursuant to the
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September 30, 2021 | December 31, 2020 | September 30, 2022 | December 31, 2021 | |||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
Assets: | ||||||||||||||||
Current assets: | ||||||||||||||||
Cash | $ | 561,945 | $ | 1,336,674 | $ | 274,392 | $ | 470,895 | ||||||||
Prepaid expenses | 260,089 | 412,626 | 61,923 | 198,172 | ||||||||||||
Total current assets | 822,034 | 1,749,300 | 336,315 | 669,067 | ||||||||||||
Investments held in Trust Account | 414,029,696 | 414,001,166 | 415,757,948 | 414,091,576 | ||||||||||||
Total Assets | $ | 414,851,730 | $ | 415,750,466 | $ | 416,094,263 | $ | 414,760,643 | ||||||||
Liabilities and Stockholders’ Deficit: | ||||||||||||||||
Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders’ Deficit: | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Accounts payable | $ | 1,837 | $ | 76,800 | $ | 29,331 | $ | 25,210 | ||||||||
Accrued expenses | 55,000 | 186,500 | 105,000 | 74,510 | ||||||||||||
Franchise tax payable | 141,050 | 11,625 | 69,639 | 190,790 | ||||||||||||
Income tax payable | 254,072 | — | ||||||||||||||
| Working capital loan - related party | 200,000 | — | ||||||||||||||
Total current liabilities | 197,887 | 274,925 | 658,042 | 290,510 | ||||||||||||
Derivative warrant liabilities | 6,366,660 | 16,481,150 | 1,050,350 | 6,848,900 | ||||||||||||
Total Liabilities | 6,564,547 | 16,756,075 | 1,708,392 | 7,139,410 | ||||||||||||
Commitments and Contingencies | 0 | 0 | ||||||||||||||
Class A common stock subject to possible redemption, $0.0001 par value; 16,560,000 shares at $25.00 per share as of September 30, 2021 and December 31, 2020 | 414,000,000 | 414,000,000 | ||||||||||||||
Class A common stock subject to possible redemption, $0.0001 par value; 16,560,000 shares at redemption value of approximately $25.08 and $25.00 per share as of September 30, 2022 and December 31, 2021, respectively | 415,324,977 | 414,000,000 | ||||||||||||||
Stockholders’ Deficit: | ||||||||||||||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; NaN issued and outstanding | 0— | — | ||||||||||||||
Class A common stock, $0.0001 par value; 380,000,000 shares authorized; 245,600 shares issued and outstanding as of September 30, 2021 and December 31, 2020 | 25 | 25 | ||||||||||||||
Class B common stock, $0.0001 par value; 1,000,000 shares authorized; 120,000 shares issued and outstanding as of September 30, 2021 and December 31, 2020 | 12 | 12 | ||||||||||||||
Class F common stock, $0.0001 par value; 50,000,000 shares authorized; 828,000 shares issued and outstanding as of September 30, 2021 and December 31, 2020 | 83 | 83 | ||||||||||||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; no shares issued or outstanding as of September 30, 2022 and December 31, 2021 | — | — | ||||||||||||||
Class A common stock, $0.0001 par value; 380,000,000 shares authorized; 245,600 shares issued and outstanding as of September 30, 2022 and December 31, 2021 | 25 | 25 | ||||||||||||||
Class B common stock, $0.0001 par value; 1,000,000 shares authorized; 120,000 shares issued and outstanding as of September 30, 2022 and December 31, 2021 | 12 | 12 | ||||||||||||||
Class F common stock, $0.0001 par value; 50,000,000 shares authorized; 828,000 shares issued and outstanding as of September 30, 2022 and December 31, 2021 | 83 | 83 | ||||||||||||||
Additional paid-in capital | 0 | 0 | — | — | ||||||||||||
Accumulated deficit | (5,712,937 | ) | (15,005,729 | ) | (939,226 | ) | (6,378,887 | ) | ||||||||
Total stockholders’ deficit | (5,712,817 | ) | (15,005,609 | ) | (939,106 | ) | (6,378,767 | ) | ||||||||
Total Liabilities and Stockholders’ Deficit | $ | 414,851,730 | $ | 415,750,466 | ||||||||||||
Total Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders’ Deficit | $ | 416,094,263 | $ | 414,760,643 | ||||||||||||
For the Three Months Ended September 30, 2021 | For the Nine Months Ended September 30, 2021 | For the Period from September 11, 2020 (Inception) Through September 30, 2020 | ||||||||||
General and administrative expenses | $ | 140,054 | $ | 519,203 | $ | 5,000 | ||||||
General and administrative expenses - related party | 60,000 | 183,030 | — | |||||||||
Franchise tax expense | 49,863 | 147,995 | — | |||||||||
Total operating expenses | (249,917 | ) | (850,228 | ) | (5,000 | ) | ||||||
Other income | ||||||||||||
Change in fair value of derivative warrant liabilities | 2,668,190 | 10,114,490 | — | |||||||||
Gain on investments held in Trust Account | 16,016 | 28,530 | — | |||||||||
Net income (loss) | $ | 2,434,289 | $ | 9,292,792 | $ | (5,000 | ) | |||||
Weighted average shares outstanding of Class A common stock, basic and diluted | 16,805,600 | 16,805,600 | — | |||||||||
Basic and diluted net income per share, Class A common stock | $ | 0.14 | $ | 0.52 | $ | — | ||||||
Weighted average shares outstanding of Class B common stock, basic and diluted | 120,000 | 120,000 | 120,000 | |||||||||
Basic and diluted net income (loss) per share, Class B common stock | $ | 0.14 | $ | 0.52 | $ | (0.01 | ) | |||||
Weighted average shares outstanding of Class F common stock, basic and diluted | 828,000 | 828,000 | 828,000 | |||||||||
Basic and diluted net income (loss) per share, Class F common stock | $ | 0.14 | $ | 0.52 | $ | (0.01 | ) | |||||
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
General and administrative expenses | $ | 120,244 | $ | 140,054 | $ | 398,988 | $ | 519,203 | ||||||||
General and administrative expenses - related party | 60,000 | 60,000 | 180,000 | 183,030 | ||||||||||||
Franchise tax expense | 50,411 | 49,863 | 149,639 | 147,995 | ||||||||||||
Total operating expenses | (230,655 | ) | (249,917 | ) | (728,627 | ) | (850,228 | ) | ||||||||
Other income: | ||||||||||||||||
Change in fair value of derivative warrant liabilities | 836,020 | 2,668,190 | 5,798,550 | 10,114,490 | ||||||||||||
Gain on investments held in Trust Account | 1,516,856 | 16,016 | 2,076,287 | 28,530 | ||||||||||||
Income before tax | 2,122,221 | 2,434,289 | 7,146,210 | 9,292,792 | ||||||||||||
Income tax expense | 307,953 | — | 381,572 | — | ||||||||||||
Net income | $ | 1,814,268 | $ | 2,434,289 | $ | 6,764,638 | $ | 9,292,792 | ||||||||
Weighted average shares outstanding of Class A common stock, basic and diluted | 16,805,600 | 16,805,600 | 16,805,600 | 16,805,600 | ||||||||||||
| Basic and diluted net income per share, Class A common stock | $ | 0.10 | $ | 0.14 | $ | 0.38 | $ | 0.52 | ||||||||
Weighted average shares outstanding of Class B common stock, basic and diluted | 120,000 | 120,000 | 120,000 | 120,000 | ||||||||||||
| Basic and diluted net income per share, Class B common stock | $ | 0.10 | $ | 0.14 | $ | 0.38 | $ | 0.52 | ||||||||
Weighted average shares outstanding of Class F common stock, basic and diluted | 828,000 | 828,000 | 828,000 | 828,000 | ||||||||||||
| Basic and diluted net income per share, Class F common stock | $ | 0.10 | $ | 0.14 | $ | 0.38 | $ | 0.52 | ||||||||
Common Stock | ||||||||||||||||||||||||||||||||||||
Class A | Class B | Class F | Additional Paid-In Capital | Accumulated Deficit | Total Stockholders' Deficit | |||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||
Balance - December 31, 2021 | 245,600 | $ | 25 | 120,000 | $ | 12 | 828,000 | $ | 83 | $ | — | $ | (6,378,887 | ) | $ | (6,378,767 | ) | |||||||||||||||||||
Net income | — | — | — | — | — | — | — | 3,544,553 | 3,544,553 | |||||||||||||||||||||||||||
Balance - March 31, 2022 (unaudited) | 245,600 | 25 | 120,000 | 12 | 828,000 | 83 | — | (2,834,334 | ) | (2,834,214 | ) | |||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | 1,405,817 | 1,405,817 | |||||||||||||||||||||||||||
Increase in redemption value of Class A common stock subject to possible redemption | — | — | — | — | — | — | — | (166,486 | ) | (166,486 | ) | |||||||||||||||||||||||||
Balance - June 30, 2022 (unaudited) | 245,600 | 25 | 120,000 | 12 | 828,000 | 83 | — | (1,595,003 | ) | (1,594,883 | ) | |||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | 1,814,268 | 1,814,268 | |||||||||||||||||||||||||||
Increase in redemption value of Class A common stock subject to possible redemption | — | — | — | — | — | — | — | (1,158,491 | ) | (1,158,491 | ) | |||||||||||||||||||||||||
Balance - September 30, 2022 (unaudited) | 245,600 | $ | 25 | 120,000 | $ | 12 | 828,000 | $ | 83 | $ | — | $ | (939,226) | $ | (939,106) | |||||||||||||||||||||
Common Stock | Common Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class A | Class B | Class F | Total Stockholders’ Deficit | Class A | Class B | Class F | Additional Paid-In Capital | Accumulated Deficit | Total Stockholders' Deficit | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Additional Paid- In Capital | Accumulated Deficit | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance - December 31, 2020 | 245,600 | $ | 25 | 120,000 | $ | 12 | 828,000 | $ | 83 | $ | 0 | $ | (15,005,729 | ) | $ | (15,005,609 | ) | 245,600 | $ | 25 | 120,000 | $ | 12 | 828,000 | $ | 83 | $ | — | $ | (15,005,729 | ) | $ | (15,005,609 | ) | ||||||||||||||||||||||||||||||||||||||
Net incom e | — | — | — | — | — | — | — | 7,167,069 | 7,167,069 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | 7,167,069 | 7,167,069 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance - March 31, 2021 (Unaudited), as restated, see Note 1 | 245,600 | 25 | 120,000 | 12 | 828,000 | 83 | 0 | (7,838,660 | ) | (7,838,540 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance - March 31, 2021 (unaudited) | 245,600 | 25 | 120,000 | 12 | 828,000 | 83 | — | (7,838,660 | ) | (7,838,540 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | (308,566 | ) | (308,566 | ) | — | — | — | — | — | — | — | (308,566 | ) | (308,566 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance - June 30, 2021 (Unaudited), as restated, see Note 1 | 245,600 | 25 | 120,000 | 12 | 828,000 | 83 | 0 | (8,147,226 | ) | (8,147,106 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance - June 30, 2021 (unaudited) | 245,600 | 25 | 120,000 | 12 | 828,000 | 83 | — | (8,147,226 | ) | (8,147,106 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | 2,434,289 | 2,434,289 | — | — | — | — | — | — | — | 2,434,289 | 2,434,289 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance - September 30, 2021 (Unaudited) | 245,600 | $ | 25 | 120,000 | $ | 12 | 828,000 | $ | 83 | $ | 0 | $ | (5,712,937 | ) | $ | (5,712,817 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance - September 30, 2021 (unaudited) | 245,600 | $ | 25 | 120,000 | $ | 12 | 828,000 | $ | 83 | $ | — | $ | (5,712,937 | ) | $ | (5,712,817 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
For The Period From September 11, 2020 (Inception) Through September 30, 2020 | ||||||||||||||||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||||||||||||||||
Class A | Class B | Class F | Total Stockholders’ Deficit | |||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Additional Paid- In Capital | Accumulated Deficit | |||||||||||||||||||||||||||||
Balance - September 11, 2020 (inception) | 0— | $ | 0— | 0— | $ | 0— | 0— | $ | 0— | $ | 0— | $ | 0— | $ | 0— | |||||||||||||||||||||
Issuance of Class B common stock to Sponsor | — | — | 120,000 | 12 | — | — | 18,738 | — | 18,750 | |||||||||||||||||||||||||||
Issuance of Class F common stock to Sponsor | — | — | — | — | 690,000 | 69 | 6,181 | — | 6,250 | |||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | (5,000 | ) | (5,000 | ) | |||||||||||||||||||||||||
Balance - September 30, 2020 (unaudited) | 0— | $ | 0— | 120,000 | $ | 12 | 690,000 | $ | 69 | $ | 24,919 | $ | (5,000 | ) | $ | 20,000 | ||||||||||||||||||||
For the Nine Months Ended September 30, | ||||||||||||||||
For the Nine Months Ended September 30, 2021 | For the Period From September 11, 2020 (Inception) Through September 30, 2020 | 2022 | 2021 | |||||||||||||
Cash Flows from Operating Activities: | ||||||||||||||||
Net income (loss) | $ | 9,292,792 | $ | (5,000 | ) | |||||||||||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||||||||||
Net income | $ | 6,764,638 | $ | 9,292,792 | ||||||||||||
Adjustments to reconcile net income to net cash used in operating activities: | ||||||||||||||||
Change in fair value of derivative warrant liabilities | (10,114,490 | ) | (5,798,550 | ) | (10,114,490 | ) | ||||||||||
Gain on investments held in Trust Account | (28,530 | ) | (2,076,287 | ) | (28,530 | ) | ||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||
Prepaid expenses | 152,537 | 136,249 | 152,537 | |||||||||||||
Accounts payable | (74,963 | ) | 4,121 | (74,963 | ) | |||||||||||
Accrued expenses | (131,500 | ) | 30,490 | (131,500 | ) | |||||||||||
Franchise tax payable | 129,425 | (121,151 | ) | 129,425 | ||||||||||||
Income tax payable | 254,072 | — | ||||||||||||||
Net cash used in operating activities | (774,729 | ) | — | (806,418 | ) | (774,729 | ) | |||||||||
Cash Flows from Investing Activities | ||||||||||||||||
Investment income released from Trust Account to pay for taxes | 409,915 | — | ||||||||||||||
Net cash provided by investing activities | 409,915 | — | ||||||||||||||
Cash Flows from Financing Activities: | ||||||||||||||||
| Proceeds from working capital loan- related party | 200,000 | — | ||||||||||||||
Net cash provided by financing activities | 200,000 | — | ||||||||||||||
Net change in cash | (774,729 | ) | — | (196,503 | ) | (774,729 | ) | |||||||||
Cash - beginning of the period | 1,336,674 | — | 470,895 | 1,336,674 | ||||||||||||
Cash - end of the period | $ | 561,945 | $ | — | $ | 274,392 | $ | 561,945 | ||||||||
Supplemental disclosure of noncash activities: | ||||||||||||||||
Def ffering costs paid in exchange for issuance of Class B common stock to Sponsorerred o | $ | 0— | $ | 18,750 | ||||||||||||
Deferred o ffering costs paid in exchange for issuance of Class F common stock to Sponsor | $ | 0— | $ | 6,250 | ||||||||||||
Deferred o ffering costs included in accrued expenses | $ | 0— | $ | 5,000 | ||||||||||||
As of March 31, 2021 (unaudited) | As Reported | Adjustment | As Restated | |||||||||
Total assets | $ | 415,447,939 | $ | — | $ | 415,447,939 | ||||||
Total liabilities | $ | 9,286,479 | $ | — | $ | 9,286,479 | ||||||
Class A common stock subject to possible redemption | 401,161,450 | 12,838,550 | 414,000,000 | |||||||||
Preferred stock | 0— | 0— | 0— | |||||||||
Class A common stock | 76 | (51 | ) | 25 | ||||||||
Class B common stock | 12 | — | 12 | |||||||||
Class F common stock | 83 | — | 83 | |||||||||
Additional paid-in capital | 2,996,739 | (2,996,739 | ) | — | ||||||||
Retained earnings (accumulated deficit) | 2,003,100 | (9,841,760 | ) | (7,838,660 | ) | |||||||
Total stockholders’ equity (deficit) | $ | 5,000,010 | $ | (12,838,550 | ) | $ | (7,838,540 | ) | ||||
Total Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders’ Equity (Deficit) | $ | 415,447,939 | $ | — | $ | 415,447,939 | ||||||
For the Three Months Ended March 31, 2021 (unaudited) | ||||||||||||
As Reported | Adjustment | As Restated | ||||||||||
Supplemental Disclosure of Noncash Financing Activities: | ||||||||||||
Change in value of Class A common stock subject to possible redemption | $ | (7,167,075 | ) | $ | 7,167,075 | $ | 0— | |||||
As of June 30, 2021 (unaudited) | As Reported | Adjustment | As Restated | |||||||||
Total assets | $ | 415,085,146 | $ | — | $ | 415,085,146 | ||||||
Total liabilities | $ | 9,232,252 | $ | — | $ | 9,232,252 | ||||||
Class A common stock subject to possible redemption | 400,852,875 | 13,147,125 | 414,000,000 | |||||||||
Preferred stock | 0— | 0— | 0— | |||||||||
Class A common stock | 77 | (52 | ) | 25 | ||||||||
Class B common stock | 12 | — | 12 | |||||||||
Class F common stock | 83 | — | 83 | |||||||||
Additional paid-in capital | 3,305,313 | (3,305,313 | ) | 0 | ||||||||
Retained earnings (accumulated deficit) | 1,694,534 | (9,841,760 | ) | (8,147,226 | ) | |||||||
Total stockholders’ equity (deficit) | $ | 5,000,019 | $ | (13,147,125 | ) | $ | (8,147,106 | ) | ||||
Total Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders’ Equity (Deficit) | $ | 415,085,146 | $ | — | $ | 415,085,146 | ||||||
For the Six Months Ended June 30, 2021 (unaudited) | ||||||||||||
As Previously Reported | Adjustment | As Restated | ||||||||||
Supplemental Disclosure of Noncash Financing Activities: | ||||||||||||
Change in value of Class A common stock subject to possible redemption | $ | (6,858,500 | ) | $ | 6,858,500 | $ | 0— | |||||
Earnings Per Share | ||||||||||||
As Reported (1) | Adjustment | As Restated | ||||||||||
For the three months ended March 31, 2021 (unaudited) | ||||||||||||
Net income | $ | 7,167,069 | $ | — | $ | 7,167,069 | ||||||
Class A common stock | ||||||||||||
Weighted average shares outstanding | — | 16,805,600 | 16,805,600 | |||||||||
| Basic and diluted income per share | $ | — | $ | 0.40 | $ | 0.40 | ||||||
Class B common stock | ||||||||||||
Weighted average shares outstanding | — | 120,000 | 120,000 | |||||||||
| Basic and diluted income per share | $ | — | $ | 0.40 | $ | 0.40 | ||||||
Class F common stock | ||||||||||||
Weighted average shares outstanding | — | 828,000 | 828,000 | |||||||||
| Basic and diluted income per share | $ | — | $ | 0.40 | $ | 0.40 | ||||||
Class A redeemable common stock | ||||||||||||
Weighted average shares outstanding | 16,560,000 | (16,560,000 | ) | — | ||||||||
| Basic and diluted income per share | $ | — | $ | — | $ | — | ||||||
Class A non-redeemable, Class B, and Class F common stock | ||||||||||||
Weighted average shares outstanding | 1,193,600 | (1,193,600 | ) | — | ||||||||
| Basic and diluted income per share | $ | 6.00 | $ | (6.00 | ) | $ | — | |||||
Earnings Per Share | ||||||||||||
As Reported (1) | Adjustment | As Restated | ||||||||||
For the three months ended June 30, 2021 ( unaudite )d | ||||||||||||
Net loss | $ | (308,566 | ) | $ | — | $ | (308,566 | ) | ||||
Class A common stock | ||||||||||||
Weighted average shares outstanding | — | 16,805,600 | 16,805,600 | |||||||||
Basic and diluted los s per share | $ | — | $ | (0.02 | ) | $ | (0.02 | ) | ||||
Class B common stock | ||||||||||||
Weighted average shares outstanding | — | 120,000 | 120,000 | |||||||||
Basic and diluted los s per share | $ | — | $ | (0.02 | ) | $ | (0.02 | ) | ||||
Class F common stock | ||||||||||||
Weighted average shares outstanding | — | 828,000 | 828,000 | |||||||||
Basic and diluted l os s per share | $ | — | $ | (0.02 | ) | $ | (0.02 | ) | ||||
Class A redeemable common stock | ||||||||||||
Weighted average shares outstanding | 16,560,000 | (16,560,000 | ) | — | ||||||||
Basic and diluted los s per share | $ | — | $ | — | $ | — | ||||||
Class A non-redeemable, Class B, and Class F common stock | ||||||||||||
Weighted average shares outstanding | 1,193,600 | (1,193,600 | ) | — | ||||||||
Basic and diluted los s per share | $ | (0.26 | ) | $ | 0.26 | $ | — | |||||
Earnings Per Share | ||||||||||||
As Reported (1) | Adjustment | As Restated | ||||||||||
For the six months ended June 30, 2021 (unaudited) | ||||||||||||
Net income | $ | 6,858,503 | $ | — | $ | 6,858,503 | ||||||
Class A common stock | ||||||||||||
Weighted average shares outstanding | — | 16,805,600 | 16,805,600 | |||||||||
Basic and diluted income per share | $ | — | $ | 0.39 | $ | 0.39 | ||||||
Class B common stock | ||||||||||||
Weighted average shares outstanding | — | 120,000 | 120,000 | |||||||||
Basic and diluted income per share | $ | — | $ | 0.39 | $ | 0.39 | ||||||
Class F common stock | ||||||||||||
Weighted average shares outstanding | — | 828,000 | 828,000 | |||||||||
Basic and diluted income per share | $ | — | $ | 0.39 | $ | 0.39 | ||||||
Class A redeemable common stock | ||||||||||||
Weighted average shares outstanding | 16,560,000 | (16,560,000 | ) | — | ||||||||
Basic and diluted income per share | $ | — | $ | — | $ | — | ||||||
Class A non-redeemable, Class B, and Class F common stock | ||||||||||||
Weighted average shares outstanding | 1,193,600 | (1,193,600 | ) | — | ||||||||
Basic and diluted income per share | $ | 5.75 | $ | (5.75 | ) | $ | — | |||||
For the Three Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended September 30, 2021 | For the Nine Months Ended September 30, 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||||||||||||
Class A | Class B | Class F | Class A | Class B | Class F | Class A | Class B | Class F | Class A | Class B | Class F | |||||||||||||||||||||||||||||||||||||
Basic and diluted net income per common share: | ||||||||||||||||||||||||||||||||||||||||||||||||
Numerator: | ||||||||||||||||||||||||||||||||||||||||||||||||
Allocation of net income | $ | 2,304,304 | $ | 16,454 | $ | 113,531 | $ | 8,796,579 | $ | 62,812 | $ | 433,401 | $ | 1,717,390 | $ | 12,263 | $ | 84,615 | $ | 2,304,304 | $ | 16,454 | $ | 113,531 | ||||||||||||||||||||||||
Denominator: | ||||||||||||||||||||||||||||||||||||||||||||||||
Basic and diluted weighted average common shares outstanding | 16,805,600 | 120,000 | 828,000 | 16,805,600 | 120,000 | 828,000 | 16,805,600 | 120,000 | 828,000 | 16,805,600 | 120,000 | 828,000 | ||||||||||||||||||||||||||||||||||||
Basic and diluted net income per common share | $ | 0.14 | $ | 0.14 | $ | 0.14 | $ | 0.52 | $ | 0.52 | $ | 0.52 | $ | 0.10 | $ | 0.10 | $ | 0.10 | $ | 0.14 | $ | 0.14 | $ | 0.14 | ||||||||||||||||||||||||
For the Nine Months Ended September 30, | ||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||
Class A | Class B | Class F | Class A | Class B | Class F | |||||||||||||||||||
Basic and diluted net income per common share: | ||||||||||||||||||||||||
Numerator: | ||||||||||||||||||||||||
Allocation of net income | $ | 6,403,422 | $ | 45,723 | $ | 315,492 | $ | 8,796,579 | $ | 62,812 | $ | 433,401 | ||||||||||||
Denominator: | ||||||||||||||||||||||||
Basic and diluted weighted average common shares outstanding | 16,805,600 | 120,000 | 828,000 | 16,805,600 | 120,000 | 828,000 | ||||||||||||||||||
Basic and diluted net income per common share | $ | 0.38 | $ | 0.38 | $ | 0.38 | $ | 0.52 | $ | 0.52 | $ | 0.52 | ||||||||||||
Gross proceeds | $ | 414,000,000 | $ | 414,000,000 | ||||
Less: | ||||||||
Fair value of Public Warrants at issuance | (11,509,200 | ) | (11,509,200 | ) | ||||
Offering costs allocated to Class A common stock subject to possible redemption | (4,323,061 | ) | (4,323,061 | ) | ||||
Plus: | ||||||||
Accretion on Class A common stock subject to possible redemption amount | 15,832,261 | 15,832,261 | ||||||
Class A common stock subject to possible redemption | $ | 414,000,000 | ||||||
Class A common stock subject to possible redemption as of December 31, 2021 | 414,000,000 | |||||||
Plus: | ||||||||
Increase in redemption value of Class A common stock subject to possible redemption | 1,324,977 | |||||||
Class A common stock subject to possible redemption as of September 30, 2022 | $ | 415,324,977 | ||||||
Description | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||
Assets: | ||||||||||||
Investments held in Trust Account | $ | 415,757,948 | $ | — | $ | — | ||||||
Liabilities: | ||||||||||||
Derivative warrant liabilities - Public warrants | $ | 1,035,000 | $ | — | $ | — | ||||||
Derivative warrant liabilities - Private placement warrants | $ | — | $ | 15,350 | $ | — | ||||||
Description | Quoted Active Markets (Level 1) | Significant Other Observable (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||
Assets: | ||||||||||||
Investments held in Trust Account | $ | 414,029,696 | $ | 0— | $ | 0— | ||||||
Liabilities: | ||||||||||||
Derivative warrant liabilities - Public warrants | $ | 6,272,100 | $ | 0— | $ | 0— | ||||||
Derivative warrant liabilities - Private placement warrants | $ | 0— | $ | 0— | $ | 94,560 | ||||||
Description | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | ||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Investments held in Trust Account | $ | 414,001,166 | $ | 0— | $ | 0— | $ | 414,091,576 | $ | — | $ | — | ||||||||||||
Liabilities: | ||||||||||||||||||||||||
Derivative warrant liabilities - Public warrants | $ | 0— | $ | 0— | $ | 16,228,800 | $ | 6,748,200 | $ | — | $ | — | ||||||||||||
Derivative warrant liabilities - Private placement warrants | $ | 0— | $ | 0— | $ | 252,350 | $ | — | $ | — | $ | 100,700 | ||||||||||||
As of September 30, 2021 | ||||
Exercise price | $ | 28.75 | ||
Unit price | $ | 24.35 | ||
Volatility | 12.16 | % | ||
Expected life of the options to convert | 5.00 | |||
Risk-free rate | 0.98 | % | ||
Dividend yield | 0.00 | % | ||
As of December 31, 2021 | ||||
Exercise price | $ | 28.75 | ||
Unit price | $ | 24.37 | ||
Volatility | 12.10 | % | ||
Expected life of the options to convert | 5.00 | |||
Risk-free rate | 1.26 | % | ||
Dividend yield | 0.00 | % | ||
Derivative warrant liabilities at December 31, 2020 | $ | 16,481,150 | ||||||||||
2022 | 2021 | |||||||||||
Derivative warrant liabilities as of January 1, | $ | 100,700 | $ | 16,481,150 | ||||||||
Transfer of Public Warrants to Level 1 | (8,942,400 | ) | — | (8,942,400 | ) | |||||||
Change in fair value of derivative warrant liabilities | (7,404,280 | ) | (55,260 | ) | (7,404,280 | ) | ||||||
Derivative warrant liabilities at March 31, 2021 | 134,470 | |||||||||||
Derivative warrant liabilities as of March 31, | 45,440 | 134,470 | ||||||||||
Change in fair value of derivative warrant liabilities | (620 | ) | (17,930 | ) | (620 | ) | ||||||
Derivative warrant liabilities at June 30, 2021 | 133,850 | |||||||||||
Derivative warrant liabilities as of June 30, | 27,510 | 133,850 | ||||||||||
Transfer of Private Placement Warrants to Level 2 | (15,350 | ) | — | |||||||||
Change in fair value of derivative warrant liabilities | (39,290 | ) | (12,160 | ) | (39,290 | ) | ||||||
Derivative warrant liabilities at September 30, 2021 | $ | 94,560 | ||||||||||
Derivative warrant liabilities as of September 30, | $ | — | $ | 94,560 | ||||||||
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
References to the “Company,” “Periphas Capital Partnering Corporation,” “Periphas,” “our,” “us” or “we” refer to Periphas Capital Partnering Corporation. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited interim condensed financial statements and the notes thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on FormAct.Act of 1934, as amended (the “Exchange Act”). We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Such statements include, but are not limited to, possible Partnering Transactions (as defined below) and the financing thereof, and related matters, as well as all other statements other than statements of historical fact included in this Form 10-Q.Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other SECSecurities and Exchange Commission (“SEC”) filings. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of Amendment No. 2 to the Company’s Annual Report on Form
Overview
We are a blank check company incorporated in Delaware on September 11, 2020. We were formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Partnering Transaction”). We are an emerging growth company and, as such, the Company is subject to all of the risks associated with emerging growth companies.
Our sponsor is PCPC Holdings, LLC, a Delaware limited liability company (the “Sponsor”). The registration statement for our Initial Public Offering was declared effective on December 9, 2020. On December 14, 2020, we consummated our Initial Public Offering of 14,400,000 CAPS
Simultaneously with the closing of the Initial Public Offering, we consummated the private placement (“Private Placement”) of 224,000 private placement CAPS
Upon the closing of the Initial Public Offering and the Private Placement on December 14, 2020, $360.0 million ($25.00 per CAPS
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Our management has broad discretion with respect to the specific application of the net proceeds of itsour initial public offering (the “Initial Public Offering”) of itsour securities called CAPS
We will have until December 14, 2022, (or March 14, 2023, if we have executed a letter of intent, agreement in principle or definitive agreement for the Partnering Transaction by December 14, 2022) to complete our initial Partnering Transaction (the “Partnering Period”). If we do not complete a Partnering Transaction within this period of time (and stockholders do not approve an amendment to the certificate of incorporation to extend this date), it will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a
Liquidity and Capital Resources
As of September 30, 2021,2022, we had cash of approximately $0.6 million$274,000 and a working capital deficit of approximately $0.6 million.
Our liquidity needs through the Initial Public Offering had been satisfied through a payment of $25,000 from the Sponsor to cover certain offering costs on our behalf in exchange for the issuance of the Founder Shares and the Performance Shares, (as defined in Note 4), the loan under the Note from the Sponsor of approximately $148,000 (as defined in Note 4) to us, and the net proceeds from the consummation of the Private Placement not held in the Trust Account. We fully repaid the Note on December 15, 2020 and borrowing is no longer available. In addition, in order to finance transaction costs in connection with a Partnering Transaction, the Sponsor or an affiliate of the Sponsor, or certain of our officers and directors may, but are not obligated to, provide us Working Capital Loans (see Note 4).Loans. As of September 30, 20212022 and December 31, 2020, there were no amounts2021, the Company had $200,000 and $0, respectively, outstanding under any Working Capital Loans.
In connection with our assessment of going concern considerations in accordance with Financial Accounting Standard Board’s (“FASB”) Accounting Standards Update (“ASU”)
Management continues to evaluate the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on our financial position, results of its operations and search for a partner candidate company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing
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corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax. Any share redemption or other share repurchase that occur after December 31, 2022, in connection with a Business Combination, extension vote or otherwise, may be subject to the excise tax. Whether and to what extent our would be subject to the excise tax in connection with a Business Combination, extension vote or otherwise will depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with the Business Combination, extension or otherwise, (ii) the structure of a Business Combination, (iii) the nature and amount of any “PIPE” or other equity issuances in connection with a Business Combination (or otherwise issued not in connection with a Business Combination but issued within the same taxable year of a Business Combination) and (iv) the content of regulations and other guidance from the Treasury. In addition, because the excise tax would be payable to us and not by the redeeming holder, the mechanics of any required payment of the excise tax have not been determined. The foregoing could cause a reduction in the cash available on hand to complete a Business Combination and in our ability to complete a Business Combination.
Risks and Uncertainties
Global events, such as recent geopolitical instability, inflation and the COVID-19 pandemic, have created or contributed to uncertainty in macroeconomic conditions, including changes in interest rates, supply chain disruptions, labor shortages and increased labor costs, which, in turn, could decrease overall economic activity, hinder economic growth or cause a recession in the United States or in the global economy. The extent of the impact of ongoing macroeconomic conditions on our financial position, results of our operations and/or search for a target company is uncertain and will depend on political, social, economic and regulatory factors that are outside of our control, including but not limited to the incidence and severity of additional COVID-19 virus variants and actions that may be taken by regulators and businesses in response to macroeconomic uncertainty. We considered the impact of the current economic environment and COVID-19 on our estimates and assumptions and determined that there were no material adverse impacts on the unaudited condensed consolidated financial statements as of September 30, 2022 and for the three and nine months ended September 30, 2022. As events continue to evolve and additional information becomes available, our estimates and assumptions may change materially in future periods.
Results of Operations
Our entire activity since inception up to September 30, 2021our Initial Public Offering was in preparation for our Initial Public Offering in December 2020, and since the consummation of our Initial Public Offering, our activity has been limited to the search for a prospective Partnering Transaction. We will not be generating any operating revenues until the closing and completion of our initial Partnering Transaction.
For the three months ended September 30, 2022, we had a net income of approximately $1.8 million, which consisted of approximately a $836,000 gain from changes in fair value of derivative warrant liabilities and approximately a $1.5 million gain on investments held in Trust Account, partially offset by approximately $120,000 in general and administrative expenses, $60,000 in general and administrative expenses - related party, approximately $308,000 in income tax expense, and approximately $50,000 in franchise tax expense.
For the three months ended September 30, 2021, we had net income of approximately $2.4 million, which consisted of approximately $2.7 million gain in change in fair value of derivative warrant liabilities and approximately a $16,000 gain on investment held in Trust Account, of approximately $16,000, partially offset by approximately $140,000 in general and administrative expenses, $60,000 in general and administrative expenses –- related party, and approximately $50,000 in franchise tax expense.
For the nine months ended September 30, 2022, we had a net income of approximately $6.8 million, which consisted of approximately a $5.8 million gain from changes in fair value of derivative warrant liabilities and approximately a $2.1 million gain on investments held in Trust Account, partially offset by approximately $399,000 in general and administrative expenses, $180,000 in general and administrative expenses - related party, approximately $382,000 in income tax expense, and approximately $150,000 in franchise tax expense.
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For the nine months ended September 30, 2021, we had net income of approximately $9.3 million, which consisted of approximately $10.1 million gain in change in fair value of derivative warrant liabilities and approximately a $29,000 gain on investment held in Trust Account, of approximately $29,000, partially offset by approximately $519,000 in general and administrative expenses, $183,000 in general and administrative expenses –- related party, and approximately $148,000 in franchise tax expense.
Contractual Obligations
We do not have any long-term debt obligations, capital lease obligations, operating lease obligations, purchase obligations or long-term liabilities, other than an agreement to pay Administrative Services Agreement fees to our Sponsor that total $20,000 per month for office space, secretarial and administrative services provided to members of our management team. During each of the three and nine months ended September 30, 2022 and 2021, the Company incurred $60,000 and $180,000, respectively, in expenses in connection with such services, respectively.
Registration and Stockholder Rights
The holders of the Founder Shares, Performance Shares, Forward Purchase Shares, Private Placement Warrants and private placement shares underlying Private Placement CAPSTM and private placement CAPSTM that may be issued upon conversion of Working Capital Loans (and any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants that are part of the Private Placement CAPSTM, and CAPSTM may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares and the Performance Shares) are entitled to registration rights pursuant to a registration rights agreement signed upon the effective date of the Initial Public Offering, requiring the Company to register such securities for resale. The holders of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of the Partnering Transaction. We will bear the expenses incurred in connection with the filing of any such registration statements.
Critical Accounting Policies
The preparation of our financial condition and results of operations is based on our financial statements which have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP. The preparation of these financial statementsGAAP”) requires usmanagement to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expensesexpenses. A summary of our significant accounting policies is included in Note 2 to our condensed financial statements in Part I, Item 1 of this Quarterly Report. Certain of our accounting policies are considered critical, as these policies are the most important to the depiction of our financial statements and require significant, difficult or complex judgments, often employing the disclosureuse of contingent assetsestimates about the effects of matters that are inherently uncertain. Such policies are summarized in the Management’s Discussion and liabilitiesAnalysis of Financial Condition and Results of Operations section in our financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to fair valueAnnual Report on Form 10-K filed with the SEC on March 22, 2022. There have been no significant changes in the application of financial instruments and accrued expenses. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We have identified the following as our critical accounting policies:
Recent Issued Accounting Standards
In June 2022, the FASB issued ASU 2022-03, ASC Subtopic 820 “Fair Value Measurement of Equity Securities Subject to Possible Redemption
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Recent Issued Accounting Standards
Our management does not believe that any recently issued, but not yet effective, accounting standards updates, if currently adopted, would have a material effect on the accompanying financial statement.
JOBS Act
The Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an “emerging growth company” and under the JOBS Act are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for
Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are a smaller reporting company as defined by Rule
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our Chief Executive Officerprincipal executive officer and Chief Financial Officer,principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended September 30, 2021,2022, as such term is defined in Rules
Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officerprincipal executive officer and Chief Financial Officerprincipal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting that occurred during the fiscal quarter ended September 30, 20212022 covered by this Quarterly Report on Form
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PART II - OTHERII-OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 1A. Risk Factors.
Factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in our Annual Report on Form 10-K filed with the SEC on March 22, 2022. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. As of the date of this Quarterly Report, on Form
The excise tax included in the Inflation Reduction Act of 2022 may decrease the value of our securities following our initial Partnering Transaction, hinder our ability to consummate an initial Partnering Transaction and decrease the amount of funds available for distribution in connection with a liquidation.
On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise tax on May 25, 2021certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax. Any share redemption or other share repurchase that occurs after December 31, 2022 in connection with a Partnering Transaction, extension vote or otherwise may be subject to the excise tax. Whether and to what extent we would be subject to the excise tax in connection with a Partnering Transaction, extension vote or otherwise will depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with a Partnering Transaction, extension vote or otherwise, (ii) the structure of a Partnering Transaction, (iii) the nature and amount of any private investment in public equity (“PIPE”) or other equity issuances in connection with a Partnering Transaction (or otherwise issued not in connection with a Partnering Transaction but issued within the same taxable year of a Partnering Transaction) and (iv) the content of regulations and other guidance from the Treasury. In addition, because the excise tax would be payable by us and not by the redeeming holder, the mechanics of any required payment of the excise tax have not been determined. The foregoing could cause a reduction in the cash available on hand to complete a Partnering Transaction and inhibit our ability to complete a Partnering Transaction.
While our sponsor is not controlled by any “foreign person,” any Partnering Transaction could potentially be subject to U.S. foreign investment regulations which may impose conditions on or limit certain investors’ ability to purchase our securities or otherwise participate in the Partnering Transaction, potentially making the securities less attractive to investors. Moreover, future investments in U.S. companies may also be subject to U.S. foreign investment regulations.
Depending on the pre-existing ownership and control of any target company, among other things, any Partnering Transaction may be subject to regulatory review and approval requirements by governmental entities, or ultimately prohibited. For example, the Committee on Foreign Investment in the U.S. (“CFIUS”) is an interagency committee authorized to review certain transactions involving acquisitions and investments in the U.S. by foreign persons in order to determine the effect of such transactions on the national security of the U.S. CFIUS has jurisdiction to review transactions that could result in control of a U.S. business directly or indirectly by a foreign person, certain non-controlling investments that afford the foreign investor non-passive rights in a “TID U.S. business” (defined as a U.S. business that (1) produces, designs, tests, manufactures, fabricates, or develops one or more critical technologies; (2) owns or operates certain critical infrastructure; or (3) collects or maintains directly or indirectly sensitive personal data of U.S. citizens), and certain acquisitions, leases, and concessions involving real estate even with no underlying U.S. business. Certain categories of acquisitions of and investments in a U.S. business also may be subject to a mandatory notification requirement.
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While any Partnering Transaction would not be subject to CFIUS review by virtue of the ownership and control of the sponsor, any pre-existing ownership and control of a target company that continues post-closing, and/or any foreign person investments in a concurrent PIPE, may trigger CFIUS’ jurisdiction. If this occurs, a Partnering Transaction could be subject to mandatory or voluntary CFIUS review and we may be unable to consummate the Partnering Transaction. CFIUS could, among other things, decide to delay a Partnering Transaction, impose conditions to mitigate national security risks arising from the transaction, recommend to the President that a Partnering Transaction be prohibited, order us to divest all or a portion of a U.S. business of a target company, or impose penalties if CFIUS believes that the mandatory notification requirement applied and we did not make a filing.
Moreover, the process of any government review, whether by CFIUS or otherwise, could be lengthy. This may limit the pool of potential targets. Because we have only a limited time to complete any Partnering Transaction, our failure to obtain any required approvals within the requisite time period may require us to liquidate. If we liquidate, our public stockholders may only receive $25.00 per Public Share initially, and our warrants will expire worthless. This will also cause you to lose any potential investment opportunity in a target and the chance of realizing future gains on your investment through any price appreciation in a target.
In addition, CFIUS could choose to review past or proposed transactions involving new or existing foreign investors in any target company, even if a filing with CFIUS is or was not required at the time of the Partnering Transaction. Any review and approval of an investment or transaction by CFIUS may have outsized impacts on transaction certainty, timing, feasibility, and cost, among other things. CFIUS policies and practices are rapidly evolving, and in the event that CFIUS reviews one or more proposed or existing investment by investors, there can be no assurances that such investors will be able to maintain, or proceed with, such investments on terms acceptable to such investors. CFIUS could seek to impose limitations or restrictions on, or prohibit, investments by such investors (including, but not limited to, limits on purchasing our Amendment No. 2stock, limits on information sharing with such investors, requiring a voting trust, governance modifications, or forced divestiture, among other things).
These restrictions on the ability of foreign persons to invest in us could limit our Annual Reportability to engage in strategic transactions that could benefit our stockholders, including a change of control, and could also affect the price that an investor may be willing to pay for common stock or the securities after we undertake a Partnering Transaction.
The SEC has recently issued proposed rules to regulate special purpose acquisition companies. Certain of the procedures that we, a potential Partnering Transaction target or others may determine to undertake in connection with such proposals may increase our costs and the time needed to complete the potential Partnering Transaction and may constrain the circumstances under which we could complete the potential Partnering Transaction.
On March 30, 2022, the SEC issued proposed rules (the “SPAC Rule Proposals”) relating, among other items, to disclosures in business combination transactions or Partnering Transactions between SPACs such as us and private operating companies; the condensed financial statement requirements applicable to transactions involving shell companies; the use of projections by SPACs in SEC filings in connection with proposed business combination or Partnering Transactions; the potential liability of certain participants in proposed business combination or Partnering Transactions; and the extent to which SPACs could become subject to regulation under the Investment Company Act, including a proposed rule that would provide SPACs a safe harbor from treatment as an investment company if they satisfy certain conditions that limit a SPAC’s duration, asset composition, business purpose and activities. Certain of the procedures that we, a potential Partnering Transaction target or others may determine to undertake in connection with the SPAC Rule Proposals, or pursuant to the SEC’s views expressed in the SPAC Rule Proposals, may increase the costs of negotiating and completing a potential Partnering Transaction and the time required to consummate a transaction, and may constrain the circumstances under which we could complete a potential Partnering Transaction.
If we are deemed to be an investment company for purposes of the Investment Company Act, we may be forced to abandon our efforts to complete a potential Partnering Transaction and instead be required to liquidate the Company. To mitigate the risk of that result, in September 2022, we instructed Continental Stock Transfer & Trust Company to liquidate the securities held in the Trust Account and instead hold all funds in the Trust Account in cash. As a result, following such change, we will likely receive minimal, if any, interest on the funds held in the Trust Account, which may reduce the dollar amount that our public shareholders would receive upon any redemption or liquidation of the Company.
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As indicated above, the Company completed its initial public offering in December 2020 and has operated as a blank check company searching for a company with which to partner to effectuate a Partnering Transaction since such time (or approximately 23 months). The SPAC Rule Proposals relate, among other matters, to the circumstances in which SPACs such as us could potentially be subject to the Investment Company Act. The SPAC Rule Proposals would provide a safe harbor for such companies from the definition of “investment company” under Section 3(a)(1)(A) of the Investment Company Act, provided that a SPAC satisfies certain criteria. To comply with the duration limitation of the proposed safe harbor, a SPAC would have a limited time period to announce and complete a de-SPAC transaction. Specifically, to comply with the safe harbor, the SPAC Rule Proposals would require a company to file a report on Form
There is currently uncertainty concerning the applicability of the Investment Company Act to a SPAC, including a company like ours, that does not complete its initial business combination or Partnering Transaction within the proposed time frame set forth in the proposed safe harbor rule. As a result, it is possible that a claim could be made that we have been operating as an unregistered investment company. If we were deemed to be an investment company for purposes of the Investment Company Act, we might be forced to abandon our efforts to complete a potential Partnering Transaction and instead be required to liquidate the Company. If we are required to liquidate the Company, our investors would not be able to realize the benefits of owning shares in a successor operating business, including the potential appreciation in the value of our shares and warrants or rights following such a transaction, and our warrants would expire worthless.
The funds in the Trust Account were, from our initial public offering, held only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds investing solely in U.S. government treasury obligations and meeting certain conditions under Rule 2a-7 under the Investment Company Act. To mitigate the risk of us being deemed to have been operating as an unregistered investment company (including under the subjective test of Section 3(a)(1)(A) of the Investment Company Act of 1940, as amended), in early November 2022, we instructed Continental Stock Transfer & Trust Company, the trustee with respect to the Trust Account, to liquidate the U.S. government treasury obligations or money market funds held in the Trust Account and thereafter to hold all funds in the Trust Account in cash (i.e., in one or more non-interest bearing bank accounts) until the earlier of consummation of the potential Partnering Transaction or liquidation. This means that the amount available for redemption may not increase in the future.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
Item 5. Other Information
None.
Item 6. Exhibits
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| * | Filed herewith. |
| ** | These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and are deemed not filed for purposes of Section 18 of the |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: December 29, 2021
PERIPHAS CAPITAL PARTNERING CORPORATION | ||||
| By: | /s/ Sanjeev Mehra | |||
| Name: | Sanjeev Mehra | |||
| Title: | Chief Executive Officer | |||
| (Principal Executive Officer) | ||||
| By: | /s/ | ||||
| Name: | |||||
| Title: | Chief Financial Officer | ||||
| (Principal Financial and Accounting Officer) | |||||
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