References in this report (the "Quarterly Report") to "we," "us" or the
"Company" refer to Primavera Capital Acquisition Corporation References to our
"management" or our "management team" refer to our officers and directors, and
references to the "Sponsor" refer to
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act
that are not historical facts and involve risks and uncertainties that could
cause actual results to differ materially from those expected and projected. All
statements, other than statements of historical fact included in this Form
10-Q
including, without limitation, statements in this "Management's Discussion and
Analysis of Financial Condition and Results of Operations" regarding the
completion of our initial business combination, the Company's financial
position, business strategy and the plans and objectives of management for
future operations, are forward-looking statements. Words such as "expect,"
"believe," "anticipate," "intend," "estimate," "seek" and variations and similar
words and expressions are intended to identify such forward-looking statements.
Such forward-looking statements relate to future events or future performance,
but reflect management's current beliefs, based on information currently
available. A number of factors could cause actual events, performance or results
to differ materially from the events, performance and results discussed in the
forward-looking statements. 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 the
Company's final prospectus for its Initial Public Offering filed with the
Overview
We are a blank check company incorporated on
The registration statement for our initial public offering was declared
effective on
Following our initial public offering and the full exercise of the overallotment
option and the related sales of the private placement warrants described above,
a total of
Our management has broad discretion with respect to the specific application of the net proceeds from our initial public offering and the sale of the private placement warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a business combination.
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We will only have untilJanuary 26, 2023 , or 24 months from the closing of our initial public offering (as such period may be extended pursuant to a shareholder vote) to complete our initial business combination. If we have not completed our initial business combination within this time frame, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible, but not more than 10 business days thereafter, redeem the public shares at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account (less taxes payable and up to$100,000 of interest to pay dissolution expenses), divided by the number of then-outstanding public shares, which redemption will completely extinguish public shareholders' rights as shareholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject, in the case of clauses (ii) and (iii), to our obligations underCayman Islands law to provide for claims of creditors and in all cases subject to the other requirements of applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we do not complete our initial business combination within the allotted period.
We expect to continue to incur significant costs in the pursuit of our
acquisition plans. On
Recent Developments
On
Pursuant to the BCA, on the closing of the business combination and in
sequential order, (i) the Forward Purchase Subscriptions will be consummated
immediately prior to the completion of the Initial Merger or otherwise in
accordance with the terms thereof, (ii) the Company will merge with and into
Merger Sub 1, with Merger Sub 1 as the surviving entity in the merger, and,
after giving effect to such merger, continuing as a wholly owned subsidiary of
Subject to, and in accordance with, the terms and conditions of the BCA, in connection with the Initial Merger, (i) each unit will (to the extent not already separated) be automatically detached and the holder thereof will be deemed to hold one Class A ordinary share and one-half of a warrant, (ii) immediately following the separation of each unit, each issued and outstanding Class A ordinary share (but excluding (x) all of the Class A ordinary shares that will be redeemed pursuant to the election of eligible holders thereof in accordance with the Company's organizational documents in connection with the transactions contemplated by the BCA, and (y) the Eligible Shares will automatically be converted into the right to receive a number of newly issuedPubCo ordinary shares equal to (x) the sum of the aggregate number of Eligible Shares and 3,600,000, divided by (y) the aggregate number of Eligible Shares, subject to rounding, (iii) each (x) Class A ordinary share other than the Eligible Shares and (y) Class B ordinary share issued and outstanding will automatically be converted into the right to receive one newly issuedPubCo ordinary share, (iv) each issued and outstanding warrant will be assumed byPubCo and converted into a warrant to purchase onePubCo ordinary share and (v) the issued and outstanding share in the capital of Merger Sub 1 will continue existing and constitute the only issued and outstanding share in the capital of Merger Sub 1. Subject to, and in accordance with, the terms and conditions of the BCA, in connection with the Second Merger, (i) each issued and outstanding FFG ordinary share, FFG non-voting ordinary share and FFG preferred share (collectively, "Company Shares") will automatically be converted into the right to receive such number of newly issuedPubCo ordinary shares that is equal to the Company Exchange Ratio, subject to rounding, and (ii) the issued and outstanding share in the capital of Merger Sub 2 will automatically be converted into one ordinary share of theSurviving Company , which ordinary share will constitute the only issued and outstanding share in the share capital of theSurviving Company . The "Company Exchange Ratio" is a number determined by dividing the price per Company Share (i.e.US$3.365773 ) byUS$10.00 .
Subject to, and in accordance with, the terms and conditions of the BCA, in
connection with the Third Merger, (i) the issued and outstanding ordinary share
of the
The business combination is expected to close in the second half of 2022, following the receipt of the required approvals by the Company's shareholders and the fulfillment of other closing conditions.
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The BCA contains representations, warranties and covenants of each of the
parties thereto that are customary for transactions of this type. The
representations and warranties of the parties contained in the BCA will
terminate and be of no further force and effect as of the closing of the
business combination.
Liquidity and Capital Resources
As of
Through
On
On
Going Concern
As of
On
We believe we may have insufficient funds available to operate our business
prior to the Business Combination. Moreover, we will need to raise additional
capital through loans from the Sponsor, officers, directors, or third parties.
None of the Sponsor, officers or directors are under any obligation to advance
funds to, or to invest in, us. We cannot provide any assurance that new
financing will be available to us on commercially acceptable terms, if at all.
In addition, if we are not able to consummate a Business Combination before
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Results of Operations
All of our activities from inception through
We have neither engaged in any operations nor generated any revenues to date. We will not generate any operating revenues until after the completion of our initial business combination. We will generate non-operating income in the form of interest income on cash and cash equivalents held in the trust account. We expect to continue to incur increased expenses as a result of being a public company for legal, financial reporting, accounting, auditing compliance and stock exchange listing, as well as for due diligence expenses.
For the three months ended
For the six months ended
For the three months ended
For the six months ended
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 as described below.
We entered into an administrative services agreement to pay our sponsor a
monthly fee of
OnJuly 17, 2020 , we issued an unsecured promissory note (the "Promissory Note") to an affiliate of the sponsor, which was assigned to the sponsor onAugust 24, 2020 , pursuant to which we may borrow up to an aggregate principal amount of$250,000 . The Promissory Note is non-interest bearing and payable on the earlier of (i)December 31, 2021 and (ii) the completion of the Initial Public Offering. OnJanuary 26, 2021 , at the closing of the Initial Public Offering,$191,819 was repaid. As ofJune 30, 2022 andDecember 31, 2021 , there is$7,000 and$7,000 in borrowings outstanding under the promissory note, which is currently due on demand.
On
The underwriters of our initial public offering are entitled to a deferred fee
of
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Critical Accounting Policies and Estimates
This management's discussion and analysis of our financial condition and results of operations is based on our unaudited condensed financial statements, which have been prepared in accordance with GAAP. The preparation of these condensed financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to fair value 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 critical accounting policies:
Convertible Promissory Note
We accounts for our convertible promissory note under ASC 815, Derivatives and Hedging ("ASC 815"). Under 815-15-25, the election can be at the inception of a financial instrument to account for the instrument under the fair value option under ASC 825. We have made such election for our convertible promissory note. Using fair value option, the convertible promissory note is required to be recorded at its initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the note are recognized as non-cash change in the fair value of the convertible promissory note in the condensed statements of operations. The fair value of the option to convert into private warrants was valued utilizing theMonte Carlo model.
Derivative Warrant Liabilities
We evaluate our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, "Derivatives and 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 re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the condensed balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.
We account for the Warrants and
Class A Ordinary Shares Subject to Possible Redemption
We account for our Class A ordinary shares subject to possible redemption in
accordance with the guidance in ASC 480. Class A ordinary shares subject to
mandatory redemption (if any) are classified as a liability instrument and are
measured at fair value. Conditionally redeemable ordinary shares (including
ordinary shares that feature redemption rights that are either within the
control of the holder or subject to redemption upon the occurrence of uncertain
events not solely within our control) are classified as temporary equity. At all
other times, Class A ordinary shares are classified as shareholders' equity. Our
Class A ordinary shares feature certain redemption rights that are considered to
be outside of our control and subject to the occurrence of uncertain future
events. Accordingly, as of
Net Income (Loss) per Ordinary Share
We have two classes of shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Earnings and losses are shared pro rata between the two classes of shares. The potential ordinary share for outstanding warrants to purchase our shares were excluded from diluted earnings per share because the warrants are contingently exercisable and the contingencies 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 the periods.
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Recent Accounting Pronouncements
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our condensed financial statements.
Off-Balance
Sheet Arrangements
As ofJune 30, 2022 , we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.
JOBS Act
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 have elected 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 non-emerging growth companies. As a result, the financial statements included herein may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates. 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 independent registered public accounting firm's attestation report on our system of internal control over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by thePublic Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the report of the independent registered public accounting firm providing additional information about the audit and the financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation-related items such as the correlation between executive compensation and performance and comparisons of our chief executive officer's compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our initial public offering or until we are no longer an "emerging growth company," whichever is earlier.
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