PERIPHAS CAPITAL PARTNERING CORPORATION References to the "Company," "
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange 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 business combinations 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 otherSecurities and Exchange Commission ("SEC") filings.
Overview
We are a blank check company incorporated in
Our sponsor isPCPC Holdings, LLC , aDelaware limited liability company (the "Sponsor"). The registration statement for our Initial Public Offering was declared effective onDecember 9, 2020 . OnDecember 14, 2020 , we consummated our Initial Public Offering of 14,400,000 CAPS ™ at$25.00 per CAPS ™ , generating gross proceeds of$360.0 million , and incurring offering costs of approximately$4.0 million (net of reimbursement of offering costs of approximately$350,000 from the underwriter). OnDecember 14, 2020 , the underwriter exercised the over-allotment option in full, and onDecember 16, 2020 , purchased 2,160,000 additional CAPS ™ (the "Over-Allotment CAPS ™ "), generating additional gross proceeds of$54.0 million , and incurred additional offering costs of approximately$540,000 in underwriting fees (the "Over-Allotment"). Simultaneously with the closing of the Initial Public Offering, we consummated the private placement ("Private Placement") of 224,000 private placement CAPS ™ (the "Private Placement CAPS ™ ") at a price of$25.00 per CAPS ™ to the Sponsor, generating proceeds of$5.6 million . Simultaneously with the closing of the Over-Allotment onDecember 16, 2020 , we consummated the second closing of the Private Placement, resulting in the purchase of an aggregate of an additional 21,600 Private Placement CAPS ™ at a price of$25.00 per CAPS ™ by the Sponsor, generating gross proceeds to the Company of$540,000 . Upon the closing of the Initial Public Offering and the Private Placement onDecember 14, 2020 ,$360.0 million ($25.00 per CAPS ™ ) of the net proceeds of the sale of the CAPS ™ in the Initial Public Offering and of the Private Placement CAPS ™ in the Private Placement were placed in a trust account ("Trust Account") located inthe United States withContinental Stock Transfer & Trust Company acting as trustee, and were invested in money market funds meeting the conditions of paragraphs (d)(2), (d)(3) and (d)(4) of Rule 2a-7 under the Investment Company Act of 1940, as amended (the "Investment Company Act"), which invest only in directU.S. government treasury obligations, as determined by us, until the earlier of: (i) the completion of a Partnering Transaction and (ii) the distribution of the Trust Account as described below. Upon the closing of the Over-Allotment onDecember 16, 2020 , additional net proceeds from the consummation of the Over-Allotment of$54.0 million were placed in the Trust Account, for a total of$414.0 million held in Trust Account. 20
--------------------------------------------------------------------------------
Table of Contents
Our management has broad discretion with respect to the specific application of the net proceeds of our initial public offering (the "Initial Public Offering") of our securities called CAPS ™ , although substantially all of the net proceeds of the Initial Public Offering are intended to be generally applied toward completing a Partnering Transaction. Furthermore, there is no assurance that we will be able to successfully complete a Partnering Transaction. We will have untilDecember 14, 2022 , (orMarch 14, 2023 , if we have executed a letter of intent, agreement in principle or definitive agreement for the Partnering Transaction byDecember 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 per-share price, payable in cash, of$25.00 , and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders and the board of directors, liquidate and dissolve, subject in the case of clauses (i) and (iii), to our obligations underDelaware law to provide for claims of creditors and in all cases subject to the other requirements of applicable law.
Liquidity and Going Concern
As of
Our liquidity needs through the Initial Public Offering had been satisfied
through a payment of
In connection with our assessment of going concern considerations in accordance
with Financial Accounting Standard Board's ("FASB") Accounting Standards Update
("ASU")
2014-15,
"Disclosures of Uncertainties about an Entity's Ability to Continue as a Going
Concern," we have until December 14, 2022 (or March 14, 2023 , if we execute a
letter of intent, agreement in principle or definitive agreement for the
Partnering Transaction by December 14, 2022 ) to consummate a Partnering
Transaction. It is uncertain that we will be able to consummate a Partnering
Transaction by this time. If a Partnering Transaction is not consummated by this
date, there will be a mandatory liquidation and subsequent dissolution of the
Company. Management has determined that the liquidity condition and mandatory
liquidation, should a Partnering Transaction not occur, and potential subsequent
dissolution raises substantial doubt about the Company's ability to continue as
a going concern. No adjustments have been made to the carrying amounts of assets
or liabilities should the Company be required to liquidate after December 14,
2022 .
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.
Results of Operations
Our entire activity since inception up to our Initial Public Offering was in
preparation for our Initial Public Offering in
For the three months ended
21--------------------------------------------------------------------------------
Table of Contents
For the three 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 an agreement to pay Administrative Services Agreement fees to our
Sponsor that total
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 CAPS TM and private placement CAPS TM 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 CAPS TM , and CAPS TM 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 Estimates
This management's discussion and analysis of our financial condition and results
of operations is based on our financial statements, which have been prepared in
accordance with generally accepted accounting principles in
Investments Held in the Trust Account
The Company's portfolio of investments is comprised of
22--------------------------------------------------------------------------------
Table of Contents
Class A Common Stock Subject to Possible Redemption
We account for our Class A common stock subject to possible redemption in accordance with the guidance in ASC Topic 480. Class A common stock subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. Conditionally redeemable Class A common stock (including Class A common stock 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) is classified as temporary equity. At all other times, shares of Class A common stock are classified as stockholders' equity. Our shares of Class A common stock feature certain redemption rights that are considered to be outside of our control and subject to the occurrence of uncertain future events. Accordingly, 16,560,000 shares of Class A common stock subject to possible redemption are presented as temporary equity, outside of the stockholders' equity section of our condensed balance sheets.
We recognize changes in redemption value immediately as they occur and adjust the carrying value of the Class A common stock subject to possible redemption to equal the redemption value at the end of each reporting period. This method would view the end of the reporting period as if it were also the redemption date for the security. Effective with the closing of the Initial Public Offering and the over-allotment option, we recognized the accretion from initial book value to redemption amount, which resulted in charges against additional paid-in capital (to the extent available) and accumulated deficit.
Net Income Per Common Share
We comply with accounting and disclosure requirements of FASB ASC Topic 260, "Earnings Per Share." We have three classes of shares, which are referred to as Class A common stock, Class B common stock, and Class F common stock. Income and losses are shared pro rata between the three classes of shares. Net income (loss) per common stock is calculated by dividing the net income (loss) by the weighted average shares of common stock outstanding for the respective period.
The calculation of diluted net income (loss) per common share does not consider
the effect of the warrants issued in connection with the Initial Public Offering
(including exercise of the over-allotment option) and the Private Placement to
purchase an aggregate of 4,201,400 Class A common stock in the calculation of
diluted income (loss) per common share, because their exercise is contingent
upon future events and their inclusion would be anti-dilutive under the treasury
stock method. As a result, diluted net income (loss) per common share is the
same as basic net income (loss) per share for the three months ended
Derivative Warrant Liabilities
We do not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. We evaluate all of our financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and ASC 815. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.
We issued 4,140,000 warrants to purchase Class A common stock to investors in our Initial Public Offering and Over-Allotment (the "Public Warrants") and issued 61,400 Private Placement Warrants (the "Private Warrants"). All of its outstanding warrants are recognized as derivative liabilities in accordance with ASC 815-40. Accordingly, we recognize the warrant instruments as liabilities at fair value and adjust the carrying value of the instruments to fair value at each reporting period until they are exercised. The initial fair value of the Public Warrants was calculated using an option pricing method and the fair value of the Private Warrants was calculated using the Black-Scholes Option Pricing Model as ofDecember 14, 2020 .
Subsequently, as of
23--------------------------------------------------------------------------------
Table of Contents
Derivative warrant liabilities are classified as noncurrent liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities.
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 statements.
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 non-emerging growth companies. As a result, the financial statements 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 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 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 the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor's report 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 the CEO'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.
© Edgar Online, source
