References in this Annual Report to "we," "us" or the "Company" refer to Project Energy Reimagined Acquisition Corp. References to our "management" or our "management team" refer to our officers and directors, and references to the "Sponsor" refer to Smilodon Capital, 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 Annual Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Overview

We are a blank check company incorporated on February 10, 2021 as a Cayman Islands exempted company. Our business purpose is to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (referred to in this Annual Report as our initial business combination). We have not selected any specific target business, and we have not, nor has anyone on our behalf, engaged in any substantive discussions, directly or indirectly, with any target business with respect to an initial business combination. While we may pursue an initial business combination in any industry, sector or geographic region, we intend to focus on targets that enable what we call the "Electric Grid 2.0". We believe the "Electric Grid 2.0" addresses several mega trends that are creating a long tail of value-creating opportunities within the energy storage value-chain, including: (i) climate change and mandated reduction of GHG emissions, with a resulting increase in the share of renewable power generation (and associated grid-stability challenges); (ii) electrification of transportation, AI enabled grid optimization, V2G and V2X technology and smart battery management systems; and (iii) second life use of batteries and end of life battery recycling. Our mission is to partner with companies that have a roadmap to execute on the world's energy transition to clean energy, and more specifically, those that enable technological advances to facilitate the increasing demand for energy storage. We will seek to partner with a company that shares our overarching goal of solving goal seven of the United Nations Sustainable Development Goals to "ensure access to affordable, reliable, sustainable and modern energy for all" while utilizing our combined experience to drive sustainable growth and long-term economic value.

The issuance of additional shares in connection with a business combination to the owners of the target or other investors, including pursuant to the forward purchase agreements:

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 preference

? 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 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; and

? may adversely affect prevailing market prices for our Class A ordinary shares


   and/or warrants.


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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:

? 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 is payable on demand;

our inability to obtain necessary additional financing if the debt contains

? covenants restricting our ability to obtain such financing while the debt 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.

Results of Operations

We have neither engaged in any operations nor generated any revenues to date. Our only activities for the period from February 10, 2021 (inception) through December 31, 2021 were organizational activities, those necessary to prepare for the initial public offering (the "Initial Public Offering"), described below, and since the closing of the Initial Public Offering, the search for a prospective initial business combination. We do not expect to generate any operating revenues until after the completion of our initial business combination. We generate non-operating income in the form of interest income on investments held in our trust account. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as due diligence expenses.

For the period from February 10, 2021 (inception) through December 31, 2021, we had a net income of $6,418,686, which resulted from a gain on change in the fair value of warrant liabilities of $9,378,431, offset in part by expensed offering costs of $2,089,260, change in fair value of derivative liability-forward purchase agreement of $426,600, operating and formation costs of $440,985, and unrealized loss on investments held in Trust Account of $2,900.

Liquidity and Capital Resources

Until the consummation of the Initial Public Offering, our only source of liquidity was an initial purchase of founder shares by our Sponsor, for $25,000 and loans from our Sponsor.



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On November 2, 2021, the Company consummated the Initial Public Offering of 25,000,000 units (the "Units" and, with respect to the Class A ordinary shares included in the Units sold, the "Public Shares"), at $10.00 per Unit, generating gross proceeds of $250,000,000.

Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 8,150,000 warrants (the "Private Placement Warrants") at a price of $1.00 per Private Placement Warrant in a private placement to the Sponsor generating gross proceeds of $8,150,000.

The Company had granted the underwriters in the Initial Public Offering a 45-day option to purchase up to 3,750,000 additional Units to cover over-allotments, if any. On November 12, 2021, the underwriters partially exercised the over-allotment option and on November 17, 2021 purchased an additional 1,377,660 Units (the "Over-Allotment Units"), generating gross proceeds of $13,776,600.

Simultaneously with the closing of the exercise of the over-allotment option, the Company consummated the sale of 275,532 warrants (the "Over-Allotment Warrants") at a purchase price of $1.00 per warrant in a private placement to the Sponsor, generating gross proceeds of $275,532.

A total of $263,776,600 from the net proceeds of the Initial Public Offering, a portion of the sale of the private placement warrants, the sale of the over-allotment units and the sale of the over-allotment warrants was placed in a U.S.-based trust account (the "Trust Account") at J.P. Morgan Chase Bank, N.A. maintained by Continental Stock Transfer & Trust Company, acting as trustee.

For the period from February 10, 2021 (inception) through December 31, 2021, net cash used in operating activities was $886,922, which was due to a non-cash gain on the change in fair value of warrant liabilities of $9,378,431 and changes in working capital of $445,937, offset in part by our net income of $6,418,686, expensed offering costs added back to net income of $2,089,260, change in fair value of derivative liability-forward purchase agreement of $426,600 and unrealized loss on investments in the Trust Account of $2,900.

For the period from February 10, 2021 (inception) through December 31, 2021, net cash used in investing activities of $263,776,600 was the result of the amount of net proceeds from the Initial Public Offering and the partial exercise of the over-allotment option being deposited to the Trust Account.

For the period from February 10, 2021 (inception) through December 31, 2021, net cash provided by financing activities of $266,157,455 was comprised of $258,501,068 in proceeds from the issuance of units in the Initial Public Offering and the partial exercise of the over-allotment option, net of underwriter's discounts paid, $8,425,532 in proceeds from the issuance of warrants in a private placement to our Sponsor, reimbursement of offering costs from the underwriters' pursuant to the agreement letter of $527,553, proceeds from the promissory note-related party of $298,629 and proceeds from the sale of Class B ordinary shares to our Sponsor of $25,000, offset in part by the payment of $1,321,698 for offering costs associated with the Initial Public Offering and repayment of the outstanding balance on the promissory note to our Sponsor of $298,629.

As of December 31, 2021, we had marketable securities held in the Trust Account of $263,773,700 consisting of securities held in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule2a-7 under the Investment Company Act which invest only in direct U.S. government treasury.

As of December 31, 2021, we had cash of $1,493,933 held outside the Trust Account. 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.

We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less taxes payable and deferred underwriting commissions), to complete our initial business combination. We may withdraw interest income (if any) to pay income taxes, if any. Our annual income tax obligations will depend on the amount of interest and other income earned on the amounts held in the Trust Account. We expect the interest income earned on the amount in the Trust Account (if any) will be sufficient to pay our income taxes. To the extent that our equity or debt is used, in whole or in part, as consideration to complete our initial 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.



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We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business prior to our initial business combination. However, if our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial 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. In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, our Sponsor or an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we would repay such loaned amounts. In the event that our initial 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 such loans may be convertible into warrants of the post business combination entity at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants. The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our Sponsor or an affiliate of our Sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of December 31, 2021.

Contractual Obligations

Registration Rights

The holders of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans (the "Working Capital Loans") (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants issued upon conversion of the Working Capital Loans) are entitled to registration rights pursuant to a registration rights agreement signed on the effective date of the Initial Public Offering. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain "piggy-back" registration rights with respect to registration statements filed subsequent to consummation of a business combination. The Company bears the expenses incurred in connection with the filing of any such registration statements. Pursuant to the forward purchase agreement with EWI Capital SPAC I LLC, we have agreed that the forward purchase securities will be entitled to registration rights pursuant to the registration rights agreement.

Promissory Note - Related Party

On February 12, 2021, the Company issued an unsecured promissory note to the Sponsor (the "Promissory Note"), pursuant to which the Company could borrow up to $300,000 to cover expenses related to the Initial Public Offering. The Promissory Note was non-interest bearing and was payable on the earlier of (i) December 31, 2021 or the consummation of the Initial Public Offering. On November 3, 2021, the Company repaid the outstanding balance under the Promissory Note. As of December 31, 2021, there was no borrowings outstanding under the Promissory Note.

Underwriting Agreement

In connection with the Initial Public Offering, the underwriters were granted a 45-day option from the date of the prospectus to purchase up to 3,750,000 additional Units to cover over-allotments. November 12, 2021, the underwriters partially exercised the over-allotment option and on November 17, 2021 purchased an additional 1,377,660 Units at an offering price of $10.00 per Unit, generating additional gross proceeds of $13,776,600 to the Company.

In connection with the closing of the Initial Public Offering and subsequent exercise of the over-allotment option, the underwriters were paid a cash underwriting discount of $0.20 per Unit, or $5,275,532 in the aggregate. In addition, $0.35 per Unit, or $9,232,181 is payable to the underwriters for deferred underwriting commission. The deferred fee is payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes its initial business combination, subject to the terms of the underwriting agreement.



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Critical Accounting Policies

The preparation of 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:

Ordinary Shares subject to possible redemption

All of the 26,377,660 Class A ordinary shares sold as part of the Units in the Initial Public Offering and the partial exercise of the over-allotment option contain a redemption feature which allows for the redemption of such Public Shares in connection with the Company's liquidation, if there is a shareholder vote or tender offer in connection with the Business Combination and in connection with certain amendments to the amended and restated memorandum and articles of association. In accordance with ASC 480-10-S99, redemption provisions not solely within the control of the Company require ordinary shares subject to redemption to be classified outside of permanent equity. Therefore, all Public Shares have been classified outside of permanent equity.

The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid-in capital and accumulated deficit.

Net Income Per Ordinary Share

Net income per ordinary share is computed by dividing net income by the weighted-average number of ordinary shares outstanding during the period. Remeasurement associated with the redeemable Class A ordinary shares is excluded from net income per share as the redemption value approximates fair value. Therefore, the income per share calculation allocates income and losses shared pro rata between Class A and Class B ordinary shares. As a result, the calculated net income per share is the same for Class A and Class B ordinary shares. The Company has not considered the effect of the warrants sold in the Initial Public Offering, the partial exercise of the over-allotment option, and private placement to purchase an aggregate of 21,614,362 shares in the calculation of diluted income per share, since the exercise of the warrants is contingent upon the occurrence of future events. As a result, diluted income per share is the same as basic income per share for the periods presented.

Derivative Financial Instruments

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC 815, Derivatives and Hedging. For derivative financial instruments that are accounted for as assets or 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. Derivative instruments 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.

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. The Company adopted ASU 2020-06 effective January 1, 2021 using the modified retrospective method of transition. The adoption of ASU 2020-06 did not have a material impact on the financial statements for the fiscal year ended December 31, 2021.



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Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company's financial statements.

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