The following discussion and analysis of the Company's financial condition and
results of operations should be read in conjunction with the audited
consolidated financial statements and the notes related thereto which are
included in "Item 8. Financial Statements and Supplementary Data" of this Annual
Report on Form 10-K/A. Certain information contained in the discussion and
analysis set forth below includes forward-looking statements. Our actual results
may differ materially from those anticipated in these forward-looking statements
as a result of many factors, including those set forth under "Special Note
Regarding Forward-Looking Statements," "Item 1A. Risk Factors" and elsewhere in
this Annual Report on Form 10-K/A.
Overview
We are a blank check company incorporated as a Cayman Islands exempted company
and 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 ("Business Combination"). We have reviewed a number of
opportunities to enter into a Business Combination and intend to enter into the
Proposed Business Combination described below under "Recent Developments."
We intend to consummate a Business Combination using cash from the proceeds of
our initial public offering (the "Public Offering") that closed on October 9,
2020 (the "Close Date") and the private placement of warrants to purchase our
Class A ordinary shares ("Private Placement Warrants") that occurred at the
Close Date, and from additional issuances of, if any, our capital stock and our
debt, or a combination of cash, stock and debt.
At December 31, 2020, we held cash of $669,767 and current liabilities of
$331,236,916. Further, 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.
The consolidated financial statements presented in this Annual Report on Form
10-K/A have been prepared on a going concern basis and do not include any
adjustments that might arise as a result of uncertainties about our ability to
continue as a going concern.
Proposed Business Combination
On December 10, 2020 (the "Signing Date"), the Company, Edison Holdco B.V., a
Dutch private limited liability company (besloten vennootschap met beperkte
aansprakelijkheid) and wholly owned subsidiary of the Company ("Dutch Holdco"),
New TPG Pace Beneficial Finance Corp., an exempted company incorporated in the
Cayman Islands with limited liability under company number 368739 and wholly
owned subsidiary of Dutch Holdco ("New SPAC"), ENGIE New Business S.A.S., a
société par actions simplifiée organized and existing under the laws of France
("Engie Seller") and EV Charged B.V., a Dutch private limited liability company
(besloten vennootschap met beperkte aansprakelijkheid) ("EVBox Group"), entered
into a Business Combination Agreement (as amended, the "Business Combination
Agreement," and the transactions contemplated thereby, the "Proposed Business
Combination"), wherein, among other things, immediately prior and in connection
with the closing (i) the Company and Dutch Holdco will enter into an agreement
for the repurchase by Dutch Holdco of ordinary shares in Dutch Holdco, par value
EUR 0.01 (the "Dutch Holdco Common Shares"), held by the Company, subject to the
completion of the SPAC Merger (as defined below), (ii) the Company will
contribute to Dutch Holdco the aggregate amount of cash held by the Company at
such time (including the aggregate amount paid by Investors pursuant to the
Subscription Agreements (as defined below) and certain forward purchase
agreements) (the "Dutch Holdco Contribution"), (iii) immediately following the
Dutch Holdco Contribution, the Company will merge with and into New SPAC, with
New SPAC surviving as a wholly owned subsidiary of Dutch Holdco (the "SPAC
Merger"), and (iv) immediately after the SPAC Merger, Engie Seller will,
directly or indirectly, sell, transfer, assign, convey or contribute to Dutch
Holdco all of the issued and outstanding equity interests in EVBox Group, for a
purchase price of approximately $786.5 million (the "Purchase Price"),
consisting of (i) cash in an amount equal to 50% of the amount of available cash
in excess of $260.0 million plus the transaction expenses borne by the Company,
(ii) cash in an amount equal to 60% of the amount of available cash in excess of
$560.0 million plus the transaction expenses borne by the Company, (iii) cash in
an amount equal to 50% of the cash incentive compensation awards granted to
certain employees of EVBox Group that will become payable as of the closing and
(iv) Dutch Holdco Common Shares, valued at $10.00 per share, in respect of the
remaining portion of the Purchase Price; provided, that in no event will the
cash consideration described in clauses (i) to (iii) exceed $180.0 million.
In addition, Engie Seller may be eligible to receive two earnouts, payable in
additional Dutch Holdco Common Shares valued at $10.00 per share, of (i) up to
6,050,000 Dutch Holdco Common Shares based on the achievement of certain EVBox
Group revenue thresholds, and (ii) up to 3,630,000 Dutch Holdco Common Shares
based on the achievement of certain EVBox Group revenue thresholds or certain
Dutch Holdco stock price thresholds.
Under the Business Combination Agreement, the obligations of the parties to
consummate the transactions contemplated thereby are subject to a number of
conditions to closing, including the requisite approval by the Company's
stockholders, which the Company
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expects to seek at an extraordinary general meeting of the Company in the second
quarter of 2021. The Business Combination Agreement may be terminated at any
time prior to the closing by mutual written consent of the Company and Engie
Seller and, among other things, if the Proposed Business Combination has not
occurred prior to the Outside Date (as defined below). As such, the closing of
the Proposed Business Combination cannot be assured.
Concurrently with the execution of the Business Combination Agreement, the
Company entered into the following agreements:
• A Shareholders' Agreement, as subsequently amended, with Dutch Holdco,
Sponsor, and Engie Seller, which will become effective as of the closing,
which will govern certain board nomination rights and corporate governance
obligations of the parties following the closing;
• Subscription Agreements (the "Subscription Agreements") with certain
qualified institutional buyers and accredited investors (collectively, the
"Investors"), pursuant to which, among other things, the Investors agreed to
subscribe for and purchase, and the Company agreed to issue and sell to the
Investors, 22,500,000 newly issued Class A ordinary shares for gross
proceeds of approximately $225,000,000; and
• A Waiver Agreement (as subsequently amended, the "Waiver Agreement"), with
each holder of Founder Shares, pursuant to which such holders of Founder
Shares have agreed to waive the receipt of certain Class A ordinary shares
that would result from the application by the terms of the Business
Combination Agreement of Article 17 of the Company's amended and restated
memorandum and articles of association in connection with the Class A
ordinary shares issued pursuant to the Subscription Agreements. In addition,
pursuant to the Waiver Agreement, the holders of Founder Shares have agreed
to forfeit a number of Founder Shares equal to such additional amount of
Class A ordinary shares issued pursuant to certain forward purchase
agreements over an aggregate of 10,000,000 Class A ordinary shares.
Other than as specifically discussed herein, this Annual Report on Form 10-K/A
does not give effect to the Proposed Business Combination or the transactions
contemplated thereby.
On March 15, 2021, the Company, Dutch Holdco, New SPAC, Engie Seller and EVBox
Group entered into the First Amendment to Business Combination Agreement (the
"First Amendment"), pursuant to which, among other things and subject to the
terms and conditions contained therein, the parties (i) thereto clarified
certain logistical matters relating to the exchange of certain securities of the
Company for corresponding securities of New SPAC and the subsequent exchange
thereof for corresponding securities of Dutch Holdco and (ii) amended the
termination provisions to provide the Company an option, in its sole discretion,
to extend the outside date from the date that is 180 days after the Signing
Date, or June 8, 2021 (such date, as may be extended, the "Outside Date") to the
date that is 270 days after the Signing Date, provided the company informs Engie
Seller of its intention to do so by May 28, 2021.
Recent Developments
There is currently significant uncertainty regarding whether the Proposed
Business Combination will ultimately be completed on the terms currently
contemplated or at all. We were recently informed that the completion of the
audited financial statements of EVBox Group as of and for the year ended
December 31, 2020 (the "2020 EVBox Group Financials"), which would be required
to be filed in the Registration Statement on Form F-4 relating to the Proposed
Business Combination (the "Registration Statement") prior to its effectiveness,
will take significantly longer than previously anticipated. Engie Seller has
recently confirmed to us that further review of certain accounting matters is
necessary. As of the date of this Annual Report on Form 10-K/A there is no
certainty regarding the timing or nature of a resolution of such matters or
timing for finalizing the 2020 EVBox Group Financials. As a result of the delay
in the 2020 EVBox Group Financials, we currently expect that certain material
conditions to closing, including among others, the effectiveness of the
Registration Statement and the approval of the Proposed Business Combination by
our stockholders, will not be met as of the Outside Date.
Pursuant to the terms of the Business Combination Agreement, beginning on the
Outside Date, the Business Combination Agreement may be terminated by either us
or Engie Seller. However, we have the unilateral right until May 28, 2021 to
extend the Outside Date to September 6, 2021. We expect to have further
discussions with Engie Seller regarding these matters to better evaluate the
various alternatives, but have not determined whether we intend to exercise any
such rights and there is no certainty that we will exercise such rights or that
we will otherwise successfully renegotiate any economic or other terms of the
Business Combination Agreement with Engie Seller. As a result, as of the date of
this Annual Report on Form 10-K/A, we have significant doubts regarding the
likelihood that the Proposed Business Combination will be completed on the terms
currently contemplated or at all.
Please see "Item 1A. Risk Factors-We no longer expect to be in a position to
close the Proposed Business Combination by June 2021 as previously disclosed,
and significant uncertainty exists regarding whether the Proposed Business
Combination will ultimately be completed on the terms currently contemplated or
at all" for more information.
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Results of Operations
For the year ended December 31, 2020 and the period from Inception to December
31, 2019, we incurred net losses of $312,407,604 and $8,494, respectively. Our
income consists solely of interest earned on investments held in the Trust
Account. Our business activities since our Public Offering have consisted solely
of identifying and evaluating prospective acquisition targets for a Business
Combination.
Liquidity and Capital Resources
On August 12, 2019, our Sponsor purchased an aggregate of 20,000,000 Founder
Shares for an aggregate purchase price of $25,000, or approximately $0.001 per
share. On October 2, 2020, our Sponsor transferred 40,000 Founder Shares to each
of our four independent directors at their original purchase price. On October
2, 2020, our Sponsor forfeited 9,937,500 Founder Shares for no consideration On
November 20, 2020, our Sponsor forfeited 1,312,500 Founder Shares on the
expiration of the underwriters' over-allotment option. At December 31, 2020, our
Sponsor and four independent directors (collectively, the "Initial
Shareholders") held, collectively, 8,750,000 Founder Shares.
On October 9, 2020, we consummated the Public Offering of 35,000,000 Units at a
price of $10.00 per Unit generating gross proceeds of $350,000,000 before
underwriting discounts and expenses. Each Unit consists of one Public Share and
one-fifth of one Warrant. Each whole Warrant entitles the holder to purchase one
Class A ordinary share at a price of $11.50 per share. Only whole Warrants may
be exercised and no fractional Warrants will be issued upon separation of the
Units and only whole Warrants may be traded. Prior to the Close Date, we
completed the private sale of an aggregate of 6,000,000 Private Placement
Warrants, each exercisable to purchase one Class A ordinary share for $11.50 per
share, to our Sponsor, at a price of $1.50 per Private Placement Warrant.
We received gross proceeds from the Public Offering and the sale of the Private
Placement Warrants of $350,000,000 and $9,000,000, respectively, for an
aggregate of $359,000,000. $350,000,000 of the gross proceeds were deposited in
the Trust Account. At the Close Date, the remaining $9,000,000 was held outside
of the Trust Account, of which $7,000,000 was used to pay underwriting discounts
and $300,000 was used to repay notes payable to our Sponsor, with the balance
reserved to pay accrued offering and formation costs, business, legal and
accounting due diligence on prospective acquisitions and continuing general and
administrative expenses. In the future, a portion of interest income on the
funds held in the Trust Account may be released to us to pay tax obligations.
On October 14, 2020, we invested the funds held in the Trust Account in a money
market account invested in permitted United States "government securities"
within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as
amended (the "Investment Company Act"), having a maturity of 180 days or less,
or in money market funds meeting certain conditions under Rule 2a-7 under the
Investment Company Act ("Permitted Investments").
During the year ended December 31, 2020, we earned interest income of $4,618 on
investments held in the Trust Account.
At December 31, 2020, we had cash held outside of the Trust Account of $669,767,
which is available to fund our working capital requirements.
At December 31, 2020, we had current liabilities of $331,236,916, including
derivative liabilities of $327,710,621 related to the fair value of certain of
our warrants and forward purchase agreements exercisable for our Class A
ordinary shares, and accrued professional fees and other expenses of $3,526,295
primarily due to costs associated with our identification and evaluation of
potential Business Combinations. The identification and evaluation of potential
Business Combinations is continuing after December 31, 2020, and we therefore
expect to incur additional expenses, which may be significant. We expect some
portion of these expenses to be paid upon consummation of a Business
Combination. We may, however, need to raise additional funds in order to meet
the expenditures required for operating our business prior to a Business
Combination. We may request loans from our Sponsor, affiliates of our Sponsor or
certain of our executive officers and directors to fund our working capital
requirements prior to completing a Business Combination. We may use working
capital to repay such loans. Additional funds could also be raised through a
private offering of debt or equity. There can be no assurance that we will be
able to raise such funds
We may also need to obtain additional financing either to complete a Business
Combination or because we become obligated to redeem a significant number of our
Class A ordinary shares upon completion of a Business Combination, in which case
we may issue additional securities or incur debt in connection with such
Business Combination.
We have 24 months from the Close Date to complete our Business Combination. If
we do not complete a Business Combination within this period, we shall (i) cease
all operations except for the purposes of winding up; (ii) as promptly as
reasonably possible but not more than ten business days thereafter, redeem the
Public Shares, at a per share price, payable in cash, equal to the aggregate
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amount then on deposit in the Trust Account, including interest earned on the
funds in the Trust Account and not previously released to us to pay our taxes
(less 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 the remaining shareholders and the board of directors,
dissolve and liquidate, subject in each case to our obligations under Cayman
Islands law to provide for claims of creditors and the requirements of other
applicable law. The Initial Shareholders and our officers and directors have
entered into a letter agreement with us, pursuant to which they have waived
their rights to liquidating distributions from the Trust Account with respect to
their Founder Shares if we fail to complete the Business Combination within 24
months from the Close Date. However, if the Initial Shareholders acquire Public
Shares after the Close Date, they will be entitled to liquidating distributions
from the Trust Account with respect to such Public Shares if we fail to complete
the Business Combination within the allotted 24-month time period.
We intend to use substantially all of the funds held in the Trust Account,
including earned interest (which interest shall be net of taxes payable) to
consummate a Business Combination. To the extent that our capital stock or debt
is used, in whole or in part, as consideration to consummate a Business
Combination, the remaining proceeds held in the Trust Account after completion
of the Business Combination and redemptions of Class A ordinary shares, if any,
will be used as working capital to finance the operations of the target business
or businesses, make other acquisitions and pursue our growth strategy.
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities which would be considered
off-balance sheet arrangements as of December 31, 2020. 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 entered into any non-financial agreements involving assets as
of December 31, 2020.
Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease
obligations or long-term liabilities other than an administrative agreement to
pay monthly recurring expenses of $50,000 for office space, administrative and
support services to an affiliate of our Sponsor. The agreement terminates upon
the earlier of the completion of a Business Combination or the liquidation of
the Company.
We are committed to pay the deferred discount of 3.50% of the gross proceeds of
the Public Offering, or $12,250,000 (the "Deferred Discount"), to the
underwriters upon the completion of a Business Combination. The underwriters are
not entitled to receive any of the interest earned on Trust Account funds that
would be used to pay the Deferred Discount, and no Deferred Discount is payable
to the underwriters if a Business Combination is not completed within 24 months
after the Close Date.
Critical Accounting Policies
The preparation of consolidated financial statements and related disclosures in
conformity with accounting principles generally accepted in the United States
requires our 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 consolidated financial statements, and income and
expenses during the periods reported. Actual results could materially differ
from those estimates. We have identified the following as our critical
accounting policies:
Offering Costs
We comply with the requirements of ASC 340-10-S99-1 and SEC Staff Accounting
Bulletin Topic 5A "Expenses of Offering". The Company incurred offering costs of
$949,267 allocated to the issuance and sale of Class A ordinary shares in
connection with the Public Offering. These costs, together with the portions of
the underwriter discount and Deferred Discount allocated to the issuance and
sale of Class A ordinary shares, totaling $19,610,939, were charged to temporary
equity upon completion of the Public Offering. Offering costs of $588,328,
attributed to the issuance and sale of the Public Warrants were expensed at the
Close Date.
Derivative Liabilities
We evaluated the warrants included in our Units and Private Placement Warrants
(collectively, "Warrant Securities"), and our Forward Purchase Agreements and
Additional Forward Purchase Agreements (collectively, "FPAs") in accordance with
ASC 815-40,
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"Derivatives and Hedging - Contracts in Entity's Own Equity", and concluded that
the Warrant Securities and FPAs could not be accounted for as components of
equity. As the Warrant Securities and FPAs meet the definition of a derivative
in accordance with ASC 815, the Warrant Securities and FPAs are recorded as
derivative liabilities on the Balance Sheet and measured at fair value at
inception (the Close Date) and remeasured at each reporting date in accordance
with ASC 820, "Fair Value Measurement", with changes in fair value recognized in
the Statement of Operations in the period of change.
Redeemable Ordinary Shares
All of the 35,000,000 Class A ordinary shares sold as part of the Units in the
Public Offering contain a redemption feature which allows for the redemption of
such public shares in connection with the Company's liquidation if there is a
stockholder vote or tender offer in connection with the Business Combination and
in connection with certain amendments to our second amended and restated
certificate of incorporation. In accordance with SEC and its staff's guidance on
redeemable equity instruments, which has been codified in ASC 480-10-S99,
redemption provisions not solely within our control require common stock subject
to redemption to be classified outside of permanent equity. Ordinary liquidation
events, which involve the redemption and liquidation of all of our equity
instruments, are excluded from the provisions of ASC 480. We had previously
classified 1,981,961 shares in permanent equity given our charter provides that
currently, we will not redeem our public shares in an amount that would cause
our net tangible assets to be less than $5,000,001. We restated our consolidated
financial statements to classify all Class A ordinary shares as redeemable as
the threshold in our charter does not change the nature of the underlying shares
as redeemable.
The Company recognizes changes in redemption value immediately as they occur and
adjusts the carrying value of redeemable common stock to equal the redemption
value at the end of each reporting period. Increases or decreases in the
carrying amount of redeemable common stock are affected by charges against
additional paid in capital and accumulated deficit.
Net Loss per Ordinary Share
We comply with accounting and disclosure requirements of FASB ASC Topic 260,
"Earnings Per Share". Net loss per ordinary share is computed by dividing net
loss by the weighted average number of ordinary shares outstanding during the
period as calculated using the treasury stock method. At December 31, 2020, we
had outstanding warrants and forward purchase contracts to purchase up to
25,000,000 Class A ordinary shares. The weighted average of these shares was
excluded from the calculation of diluted net income per ordinary share since the
exercise of the warrants and forward purchase contracts is contingent upon the
occurrence of future events. At December 31, 2019, we did not have any dilutive
securities or other contracts that could, potentially, be exercised or converted
into ordinary shares and then share in our earnings under the treasury stock
method. As a result, diluted net loss per ordinary share is the same as basic
net loss per ordinary share for the years ended December 31, 2020 and 2019,
respectively.
We have two classes of ordinary shares, Class A ordinary shares and Class F
ordinary shares. Earnings and losses are shared pro rata between the two classes
of ordinary shares.
Recent Accounting Pronouncements
Management does not believe that any recently issued, but not yet effective,
accounting pronouncements, if currently adopted, would have a material effect on
our consolidated financial statements.
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