POST HOLDINGS PARTNERING CORPORATION The following discussion summarizes the significant factors affecting the
operating results, financial condition, liquidity and capital resources of
OVERVIEW
We are a blank check company incorporated in Delaware on January 27, 2021 for
the purpose of effecting a merger, share exchange, asset acquisition, share
purchase, reorganization or similar partnering transaction with one or more
businesses that we have not yet identified (a "Partnering Transaction").
On May 28, 2021 , we consummated the initial public offering of 30,000,000 units
(the "Units"). Each Unit consists of one share of Series A common stock, $0.0001
par value per share (the "Series A common stock" and such shares, the "Public
Shares") and one-third of one redeemable warrant (the "Public Warrants"). Each
whole Public Warrant will entitle the holder to purchase one share of Series A
common stock at an exercise price of $11.50 per share, subject to adjustment.
The Units were sold at an offering price of $10.00 per Unit, generating total
gross proceeds of $300,000,000 .
On June 3, 2021 , we issued an additional 4,500,000 Units (the "Over-Allotment
Units") pursuant to the underwriters' exercise in full of their over-allotment
option in connection with the initial public offering. The Over-Allotment Units
were priced at $10.00 per Over-Allotment Unit, generating total gross proceeds
of $45,000,000 . The term "IPO" as used herein generally refers to the
consummation of the initial public offering on May 28, 2021 and the
underwriters' exercise in full of their over-allotment option on June 3, 2021 .
We incurred offering costs in connection with the IPO of $17,887,856 , of which
$10,675,000 was for deferred underwriting commissions.
On May 28, 2021 , in conjunction with the closing of the initial public offering,
we consummated the private sale of 1,000,000 units (the "Private Placement
Units") at a purchase price of $10.00 per Private Placement Unit to our sponsor,
PHPC Sponsor, LLC (the "Sponsor"), generating total gross proceeds of
$10,000,000 . Concurrently with the sale of the Over-Allotment Units, the Sponsor
purchased an additional 90,000 Private Placement Units for total gross proceeds
of $900,000 . Each Private Placement Unit consists of one share of Series A
common stock ("the "Private Placement Shares") and one-third of one warrant,
each whole warrant entitling the Sponsor to purchase one share of Series A
common stock at an exercise price of $11.50 per share (the "Private Placement
Warrants"). The term "Private Placement" as used herein generally refers to the
consummation of the private sale of Private Placement Units on May 28, 2021 and
the purchase of Private Placement Units in conjunction with the sale of the
Over-Allotment Units on June 3, 2021 .
Of the gross proceeds received from the IPO and Private Placement, $345,000,000
(or $10.00 per Unit sold in the IPO) was deposited in a trust account (the
"Trust Account") located in the United States (the "U.S.") with Continental
Stock Transfer & Trust Company acting as trustee.
Our Sponsor, executive officers and directors (the "initial stockholders")
agreed not to propose an amendment to our amended and restated certificate of
incorporation that would modify the substance or timing of our obligation to
provide holders of our Public Shares the right to have their shares redeemed in
connection with a Partnering Transaction or to redeem 100% of our Public Shares
if we do not complete a Partnering Transaction within 24 months from the closing
of our IPO, or May 28, 2023 , or 27 months, or August 28, 2023 , following an
agreement in principle event, which means we have executed a letter of intent,
agreement in principle or definitive agreement for a Partnering Transaction
within 24 months from the closing of the IPO but have not completed the
Partnering Transaction within such 24-month period (such 24-month or 27-month
period, the "Combination Period") or with respect to any other provision
relating to the rights of holders of Public Shares (the "Public Stockholders"),
unless we provide the Public Stockholders with the opportunity to redeem their
shares of Series A common stock in conjunction with any such amendment.
We expect to continue to incur significant costs in the pursuit of a Partnering
Transaction. We cannot assure you that our plans to complete a Partnering
Transaction will be successful.
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RESULTS OF OPERATIONS
As of
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 2021 , we had $2,912,178 in our operating bank account, and
working capital of $397,254 (not taking into account $83,338 in tax obligations
that may be paid using investment income earned in the Trust Account).
Our liquidity needs prior to the closing of the IPO were satisfied through a
payment of $25,000 from the Sponsor to purchase 8,625,000 shares of Series F
common stock, $0.0001 par value per share (the "Founder Shares") and the loan of
$213,424 from the Sponsor under an unsecured promissory note, which was repaid
in full on May 28, 2021 . Subsequent to the closing of the IPO, our liquidity has
been satisfied through the proceeds from the IPO and Private Placement not held
in the Trust Account. In addition, in order to finance transaction costs in
connection with a Partnering Transaction, the Sponsor or an affiliate of the
Sponsor, or certain of our officers and directors, may, but are not obligated
to, provide us working capital loans. As of June 30, 2021 , there were no amounts
outstanding under any working capital loans.
Based on the foregoing, we believe that we will have sufficient working capital
and borrowing capacity from the Sponsor or an affiliate of the Sponsor, or
certain of our officers and directors, to meet our needs through the earlier of
the consummation of a Partnering Transaction or one year from this filing. Over
this time period, we will use these funds for paying existing accounts payable,
identifying and evaluating prospective initial Partnering Transaction
candidates, performing due diligence on prospective target businesses, paying
for travel expenditures, selecting the target business to merge with or acquire,
and structuring, negotiating and consummating the Partnering Transaction.
We do not have any long-term debt obligations, finance lease obligations,
operating lease obligations, purchase obligations or long-term liabilities.
On May 28, 2021 , we entered into a services agreement that provided that,
commencing on the date that our securities were first listed on the New York
Stock Exchange through the earlier of consummation of the Partnering Transaction
and our liquidation, we agreed to pay Post Holdings, Inc. ("Post") $40,000 per
month for office space and administrative and support services provided to
members of our management team.
The underwriters are entitled to underwriting discounts and commissions of
$16,775,000 , of which $6,100,000 was paid at the closing of the IPO and
$10,675,000 was deferred. The deferred underwriting discount will be paid to the
underwriters upon the consummation of the Partnering Transaction subject to the
terms of the underwriting agreement.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The preparation of our financial statements and related disclosures in
conformity with accounting principles generally accepted in
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where no observable traded price was available were valued using a Monte Carlo
simulation. The fair value of the Private Placement Warrants was determined
using a Black-Scholes Pricing Model using observable market data as the
significant inputs (volatility, risk free rate and dividend yield).
Series A Common Stock Subject to Possible Redemption
We account for our Series A common stock subject to possible redemption in
accordance with the guidance in ASC Topic 480, "Distinguishing Liabilities from
Equity" ("ASC 480"). Series A common stock subject to mandatory redemption (if
any) is classified as a liability instrument and is measured at fair value.
Conditionally redeemable Series A common stock (including shares of Series 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, Series A common stock is classified as stockholders' equity. Our Series A
common stock features certain redemption rights that are considered to be
outside of our control and subject to the occurrence of uncertain future events.
Accordingly, as of June 30, 2021 , 34,500,000 shares of Series A common stock
subject to possible redemption at the redemption amount were presented at
redemption value as temporary equity, outside of stockholders' equity on our
Condensed Balance Sheet.
Net Earnings (Loss) per Share
Basic and diluted earnings (loss) per share of Series A common stock subject to
possible redemption (the "redeemable common stock") and the Series A common
stock and Series F common stock not subject to possible redemption
(collectively, the "non-redeemable common stock") is presented separately under
the two-class method. Basic earnings (loss) per share is based on the average
number of shares outstanding during the periods presented for the redeemable
common stock and non-redeemable common stock. Net loss is allocated between the
redeemable common stock and non-redeemable common stock based on the weighted
average shares outstanding during the periods presented. The redeemable common
stock is remeasured to its redemption value each period. As allowed for within
ASC 480, we have made an election to treat the portion of the remeasurement
adjustment that exceeds fair value as an increase in income available to holders
of shares of redeemable common stock and as a reduction of income available to
holders of shares of non-redeemable common stock for basic and diluted earnings
(loss) per share. Diluted earnings (loss) per share is based on the average
number of shares of redeemable common stock and non-redeemable common stock used
for the basic earnings per share calculation, adjusted for the dilutive effect
of warrants, if any, using the "treasury stock" method. In addition, net
earnings (loss) for diluted earnings per share is adjusted for the after-tax
impact of changes to the fair value of derivative warrant liabilities, to the
extent it is dilutive. We have not considered the effect of the warrants sold in
the IPO and the Private Placement to purchase an aggregate 11,863,333 shares of
Series A common stock in the calculation of diluted earnings (loss) per share,
since the exercise of the warrants into shares of Series A common stock is
contingent upon the occurrence of future events. See Note 6 within "Notes to
Consolidated Financial Statements" for the calculation of basic and diluted
earnings (loss) per share of redeemable common stock and non-redeemable common
stock.
RECENTLY ISSUED ACCOUNTING STANDARDS
See Note 4 within "Notes to Condensed Financial Statements" for a discussion regarding recently issued accounting standards.
CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS
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, are made throughout this Quarterly Report on Form 10-Q (the
"Quarterly Report"). These forward-looking statements are sometimes identified
from the use of forward-looking words such as "believe," "should," "could,"
"potential," "continue," "expect," "project," "estimate," "predict,"
"anticipate," "aim," "intend," "plan," "forecast," "target," "is likely,"
"will," "can," "may" or "would" or the negative of these terms or similar
expressions elsewhere in this Quarterly Report. Our financial condition, results
of operations and cash flows may differ materially from those in the
forward-looking statements. Such statements are based on management's current
views and assumptions and involve risks and uncertainties that could affect
expected results. Those risks and uncertainties include, but are not limited to,
the following:
•our being a newly incorporated company with no operating history and no
revenues;
•our ability to select an appropriate target business or businesses;
•our ability to complete a Partnering Transaction;
•our expectations around the performance of a prospective target business or
businesses;
•our success in retaining or recruiting, or changes required in, our officers,
key employees or directors following a Partnering Transaction;
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•our directors and officers allocating their time to other businesses and potentially having conflicts of interest with our business or in approving a Partnering Transaction; •actual and potential conflicts of interest relating to Post and its subsidiaries, the Sponsor and other entities in which members of our management team are involved; •our potential ability to obtain additional financing to complete a Partnering Transaction, including from the Sponsor, Post or other third parties; •our pool of prospective target businesses, including the location and industry of such target businesses; •our ability to consummate a Partnering Transaction due to the uncertainty resulting from the recent COVID-19 pandemic and other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases); •the ability of our officers and directors to generate a number of potential Partnering Transaction opportunities; •the voting structure of our common stock, including any potential adverse effect on our ability to complete a Partnering Transaction timely or cost effectively, and, following a Partnering Transaction, our status as a controlled company and the ability of the Sponsor and Post to exercise control over our policies and operations, each as a result of the high vote feature of our Series B common stock; •our public securities' potential liquidity and trading; •the lack of a market for our securities; •the use of proceeds not held in the Trust Account or available to us from interest income on the Trust Account balance; •the Trust Account not being subject to claims of third parties; •the classification of our warrants as liabilities; •our financial performance; and •other risks and uncertainties included under "Risk Factors" within Item 1A of Part II of this Quarterly Report and in our prospectus for our IPO as filed with theU.S. Securities and Exchange Commission onMay 27, 2021 . You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Quarterly Report to conform these statements to actual results or to changes in our expectations.
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