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 Primavera Capital Acquisition LLC. The
following discussion and analysis of the Company's financial condition and
results of operations should be read in conjunction with the financial
statements and the notes thereto contained elsewhere in this Quarterly Report.
Certain information contained in the discussion and analysis set forth below
includes forward-looking statements that involve risks and uncertainties.
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/A
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 SEC.
The Company's securities filings can be accessed on the EDGAR section of the
SEC's website at www.sec.gov. Except as expressly required by applicable
securities law, the Company disclaims any intention or obligation to update or
revise any forward-looking statements whether as a result of new information,
future events or otherwise.
Overview
We are a blank check company incorporated in the Cayman Islands on July 16, 2020
formed for the purpose of effecting a merger, share exchange, asset acquisition,
share purchase, reorganization or similar business combination with one or more
businesses or entities. We intend to effectuate our Business Combination using
cash derived from the proceeds of the Initial Public Offering and the sale of
the Private Placement Warrants, our shares, debt or a combination of cash,
shares and debt.
We expect to continue to incur significant costs in the pursuit of our
acquisition plans. We cannot assure you that our plans to complete a Business
Combination will be successful.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date.
Our only activities from July 16, 2020 (inception) through September 30, 2021
were organizational activities, those necessary to prepare for and consummate
the Initial Public Offering, described below, and identifying a target company
for a Business Combination. We do not expect to generate any operating revenues
until after the completion of our Business Combination. We generate
non-operating
income in the form of interest income on marketable securities held in the Trust
Account. We incur expenses as a result of being a public company (for legal,
financial reporting, accounting and auditing compliance), as well as for due
diligence expenses.
For the three months ended September 30, 2021, we had a net income of
$5,307,590, which consists of a change in fair value of warrant liabilities of
$5,067,437, a change in fair value of FPA of $507,890, interest earned on
investment held in the Trust Account of $6,361 and offset by general and
administrative expenses of $274,098.
For the nine months ended September 30, 2021, we had a net income of
$17,418,660, which consists of a change in fair value of warrant liabilities of
$20,031,789, a change in fair value of FPA of $266,569 and interest earned on
investment held in the Trust Account of $17,078, offset by general and
administrative expenses of $804,733, and offering costs allocable to warrants of
$2,092,043.
For the period from July 16, 2020 (inception) through September 30, 2020, we had
a net loss of $5,000 which consists of general and administrative expenses of
$5,000.
Liquidity and Capital Resources
On January 26, 2021, we consummated the Initial Public Offering of 41,400,000
Units, which included a full exercise by the underwriters of their overallotment
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 our
Sponsor, generating gross proceeds of $10,280,000.

                                       20
--------------------------------------------------------------------------------
  Table of Contents
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 nine months ended September 30, 2021, cash used in operating activities
was $986,259. Net income of $17,418,660 was affected by interest earned on
marketable securities held in Trust Account of $17,078, a change in fair value
of warrant liabilities of $20,031,789, a change in fair value of FPA of
$266,569, and transaction costs allocable to warrants of $2,092,043. Changes in
operating assets and liabilities used $181,526 of cash for operating activities.
For the period from July 16, 2020 (inception) through September 30, 2020, cash
used in operating activities was $0. Net loss of $5,000 was affected by payment
of formation costs through issuance of Class B ordinary shares of $5,000.
As of September 30, 2021, we had investments held in the Trust Account of
$414,017,078 (including approximately $17,078 of interest income) consisting of
money market funds which invest primarily in U.S. Treasury Securities. 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, 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 September 30, 2021, we had cash of $682,853. 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 September 30, 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.
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 the Sponsor
up to $10,000 per month for office space, utilities, secretarial and
administrative support services. We began incurring these fees on January 21,
2021 and will continue to incur these fees monthly until the earlier of the
completion of the Business Combination and our liquidation.
The underwriters are entitled to a deferred fee of $0.35 per Unit, or
$14,490,000 in the aggregate. The deferred fee will become payable to the
underwriters from the amounts held in the Trust Account solely in the event that
the Company completes a Business Combination, subject to the terms of the
underwriting agreement.
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.

                                       21
--------------------------------------------------------------------------------
  Table of Contents
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.
Critical Accounting Policies
The preparation of condensed financial statements and related disclosures in
conformity with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, disclosure of contingent assets and
liabilities at the date of the financial statements, and income and expenses
during the periods reported. Actual results could materially differ from those
estimates. We have identified the following critical accounting policies:
Derivative Financial Instruments
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 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 FPA in accordance with the guidance contained in
ASC
815-40,
under which the Warrants and FPA do not meet the criteria for equity treatment
and must be recorded as liabilities. Accordingly, the Company classifies the
Warrants as liabilities and the FPA as an asset at their fair value and adjust
the Warrants and FPA to fair value at each reporting period. These liabilities
and asset are subject to
re-measurement
at each balance sheet date until exercised, and any change in fair value is
recognized in the statements of operations.
Class A Ordinary Shares Subject to Possible Redemption
We account for our ordinary shares subject to possible conversion in accordance
with the guidance in Accounting Standards Codification ("ASC") Topic 480
"Distinguishing Liabilities from Equity." Ordinary shares subject to mandatory
redemption are classified as a liability instrument and 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, ordinary shares
are classified as shareholders' equity. Our ordinary shares feature certain
redemption rights that are considered to be outside of our control and subject
to occurrence of uncertain future events. Accordingly, ordinary shares subject
to possible redemption are presented at redemption value as temporary equity,
outside of the shareholders' equity section of our condensed balance sheet.
Net Income (loss) Per Ordinary Share
We apply the
two-class
method in calculating earnings per share. Net income (loss) 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 (loss) per ordinary share, basic and diluted for Class B
non-redeemable
ordinary shares is calculated by dividing the net income (loss), less income
attributable to Class A redeemable ordinary shares, by the weighted average
number of Class B
non-redeemable
ordinary shares outstanding for the periods presented.
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 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.
We adopted ASU
2020-06
effective January 1, 2021. The adoption of ASU
2020-06
did not have an impact on our financial statements.
Management does not believe that any other recently issued, but not yet
effective, accounting standards, if currently adopted, would have a material
effect on our condensed financial statements.

                                       22

--------------------------------------------------------------------------------

Table of Contents

© Edgar Online, source Glimpses