Forward-Looking Statements
All statements other than statements of historical fact included in this annual
report including, without limitation, statements under this "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations" regarding our financial position, business strategy and the plans
and objectives of management for future operations, are forward looking
statements. When used in this annual report, words such "may," "should,"
"could," "would," "expect," "plan," "anticipate," "believe," "estimate,"
"continue," or the negative of such terms or other similar expressions, as they
relate to us or our management, identify forward looking statements. Factors
that might cause or contribute to such a discrepancy include, but are not
limited to, those described in our other
Overview
We are a blank check company incorporated on
The issuance of additional shares in connection with a business combination, including the issuance of forward purchase and PIPE securities, to the owners of the target or other investors:
may significantly dilute the equity interest of investors in our initial public
? offering, which dilution would increase if the anti-dilution provisions in the
Class B ordinary shares resulted in the issuance of Class A ordinary shares on
a greater than one-to-one basis upon conversion of the Class B ordinary shares;
may subordinate the rights of holders of Class A ordinary shares if preferred
? shares are issued with rights senior to those afforded our Class A ordinary
shares;
could cause a change in control if a substantial number of our Class A ordinary
? shares are issued, which may affect, among other things, our ability to use our
net operating loss carry forwards, if any, and could result in the resignation
or removal of our present officers and directors;
may have the effect of delaying or preventing a change of control of us by
? diluting the share ownership or voting rights of a person seeking to obtain
control of us;
may adversely affect prevailing market prices for our Class A ordinary shares
? and/or warrants. Similarly, if we issue debt securities or otherwise incur
significant debt to bank or other lenders or the owners of a target, it could
result in; 57 Table of Contents
? default and foreclosure on our assets if our operating revenues after an
initial business combination are insufficient to repay our debt obligations;
acceleration of our obligations to repay the indebtedness even if we make all
? principal and interest payments when due if we breach certain covenants that
require the maintenance of certain financial ratios or reserves without a
waiver or renegotiation of that covenant;
? our immediate payment of all principal and accrued interest, if any, if the
debt security is payable on demand;
our inability to obtain necessary additional financing if the debt security
? contains covenants restricting our ability to obtain such financing while the
debt security is outstanding;
? our inability to pay dividends on our Class A ordinary shares;
using a substantial portion of our cash flow to pay principal and interest on
? our debt, which will reduce the funds available for dividends on our Class A
ordinary shares if declared, expenses, capital expenditures, acquisitions and
other general corporate purposes;
? limitations on our flexibility in planning for and reacting to changes in our
business and in the industry in which we operate;
? increased vulnerability to adverse changes in general economic, industry and
competitive conditions and adverse changes in government regulation; and
limitations on our ability to borrow additional amounts for expenses, capital
? expenditures, acquisitions, debt service requirements, execution of our
strategy and other purposes and other disadvantages compared to our competitors
who have less debt.
We expect to incur significant costs in the pursuit of our initial business combination. We cannot assure you that our plans to raise capital or to complete our initial business combination will be successful.
Recent Developments
On
Pursuant to the Business Combination Agreement and subject to the approval of
the Provident shareholders, among other things, (i) immediately prior to the
First Merger Effective Time, each Provident Class B Ordinary Share, outstanding
immediately prior to the First Merger Effective Time will be automatically
converted into a number of Provident Class A Ordinary Share in accordance with
the articles of association of Provident then effective, and, after giving
effect to such automatic conversion, at the First Merger Effective Time and as a
result of the First Merger, (a) each issued and outstanding Provident Class A
Ordinary Share (other than the Provident Dissenting Shares will be cancelled in
exchange for the right to receive one Perfect Class A Ordinary Share after
giving effect to the Recapitalization (as defined below), and (b) each issued
and outstanding Provident Dissenting Share will be cancelled and carry no right
other than the right to receive the payment of the fair value of such Provident
Dissenting Share determined in accordance with Section 238 of the Companies Act
(As Revised) of the
Immediately prior to the First Merger Effective Time, (i) the Listing A&R AoA will be adopted and become effective, and (ii) Perfect will effect a share combination such that each Pre-Recapitalization Perfect Shares (whether issued and outstanding or authorized but unissued) immediately prior to the First Merger Effective Time, will be consolidated into a number of shares equal to the Combination Factor, and upon such share combination, (a) each resulting share held by any person other than the Founder Parties will be repurchased and cancelled by Perfect in exchange for the issuance of one Perfect Class A Ordinary Share, and (b) each resulting share that is held by the Founder Parties will be repurchased and cancelled by Perfect in exchange for the issuance of one
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Perfect Class B Ordinary Share. Pursuant to the Listing A&R AoA, each Perfect Class A Ordinary Share will have one vote and each Perfect Class B Ordinary Share will have ten votes.
The "Combination Factor" is a number resulting from dividing the Per Share
Perfect Equity Value by
The Business Combination has been approved by the boards of directors of both Provident and Perfect.
The Business Combination Agreement contains customary representations, warranties and covenants by the parties thereto and the Closing is subject to certain conditions as further described in the Business Combination Agreement.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date.
Our only activities from inception through
For the year ended
For the period from
Liquidity and Capital Resources
On
Following our Initial Public Offering and the sale of the Private Placement
Warrants, a total of
For the year ended
For the year ended
As of
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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, structure, negotiate and complete a Business Combination.
In order to fund working capital deficiencies or finance transaction costs in
connection with a Business Combination, our Sponsor will provide us funds and
financial support 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
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 initial 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 completion of our Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination.
Off-balance sheet financing arrangements
We have no obligations, assets or liabilities, which would be considered
off-balance sheet arrangements as of
Contractual obligations
We do not have any long-term debt, capital lease obligations, operating lease
obligations or long-term liabilities, other than an agreement to pay our sponsor
a monthly fee of
The underwriters are entitled to a deferred underwriting discount of 3.5% of the gross proceeds of the our Initial Public Offering upon the completion of our initial Business Combination.
Critical Accounting Policies
Management's discussion and analysis of our results of operations and liquidity and capital resources are based on our audited financial information. We describe our significant accounting policies in Note 2-Significant Accounting Policies, of the Notes to Financial Statements included in this report. The preparation of these 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 evaluated the Warrants in accordance with ASC 815-40, "Derivatives and Hedging - Contracts in Entity's Own Equity", and concluded that a provision in the Warrant Agreement related to certain tender or exchange offers as well as provisions that provided for potential changes to the settlement amounts dependent upon the characteristics of the holder of the warrant, precludes the Warrants from being accounted for as components of equity. As the Warrants meet the definition of a derivative as contemplated in ASC 815 and are not eligible for an exception from derivative accounting, the Warrants are recorded as derivative liabilities on the Balance Sheets and measured at fair value at inception (on the date of the IPO) and at each reporting date in accordance with ASC 820, "Fair Value Measurement", with changes in fair value recognized in the Statement of Income in the period of change.
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Treatment of Temporary Equity
As a result of recent guidance to Special Purpose Acquisition Companies by the
Recent Accounting Pronouncements
In
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