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OFFON

SOCIAL CAPITAL SUVRETTA HOLDINGS CORP. III

(DNAC)
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SOCIAL CAPITAL SUVRETTA III : Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)

08/16/2021 | 05:00pm EDT
References in this report (this "Quarterly Report") to "we," "us" or the
"Company" refer to Social Capital Suvretta Holdings Corp. III. References to our
"management" or our "management team" refer to our officers and directors, and
references to the "Sponsor" refer to SCS Sponsor III 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 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 Quarterly
Report including, without limitation, statements in this "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
regarding 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 February 25,
2021, formed for the purpose of effecting a merger, share exchange, asset
acquisition, share purchase, reorganization or similar business combination with
one or more businesses (a "Business Combination"). 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 Shares, 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 February 25, 2021 (inception) through June 30, 2021
were organizational activities and those necessary to prepare for the Initial
Public Offering, described below. We do not expect to generate any operating
revenues until after the completion of our Business Combination. We will
generate
non-operating
income in the form of interest income on marketable securities held in the Trust
Account. We will 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 June 30, 2021, we had a net loss of $143, which
consisted of formation and operating costs.
For the period February 25, 2021 (inception) through June 30, 2021, we had net
loss of $5,325, which consisted of formation and operating costs.
Liquidity and Capital Resources
Subsequent to the date of this Quarterly Report, on July 2, 2021, we completed
the Initial Public Offering of 25,000,000 Public Shares, which includes the
partial exercise by the underwriters of their over-allotment option in the
amount of 3,000,000 Public Shares, at $10.00 per Public Share, generating gross
proceeds of $250,000,000. Simultaneously with the closing of the Initial Public
Offering, we consummated the sale of 640,000 Private Placement Shares at a price
of $10.00 per Private Placement Share in a private placement to the Sponsor,
generating gross proceeds of $6,400,000.
Following the Initial Public Offering, the partial exercise of the
over-allotment option and the sale of the Private Placement Shares, a total of
$250,000,000 was placed in the Trust Account. We incurred $12,479,666 in Initial
Public Offering related costs, including $4,400,000 of underwriting fees,
$7,700,000 of deferred underwriting fees and $379,666 of other costs.
For the period from February 25, 2021 (inception) through June 30, 2021, cash
used in operating activities was $19,837. Net loss of $5,325 was offset by
formation costs paid through issuance of Class B ordinary shares to the Sponsor
of $5,000. Changes in operating assets and liabilities used $19,512 of cash for
operating activities.
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
income taxes payable), 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.

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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,
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 such Working Capital Loans may be
convertible into shares at a price of $10.00 per share at the option of the
lender. Such shares would be identical to the Private Placement Shares.
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 initial 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 completion 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 June 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 an
affiliate of the Sponsor up to $10,000 per month for office space,
administrative and support services. Upon completion of a Business Combination
or its liquidation, the Company will cease paying these monthly fees.
The underwriters are entitled to a deferred underwriting commission of $0.35 per
Public Share sold in the base offering, or $7,700,000 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 we complete a Business Combination,
subject to the terms of the underwriting agreement.
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 revenue and expenses
during the periods reported. Actual results could materially differ from those
estimates. We have not identified any critical accounting policies.
Recent Accounting Standards
Management does not believe that any recently issued, but not yet effective,
accounting standards, if currently adopted, would have a material effect on our
condensed financial statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not required for smaller reporting companies.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are designed to ensure that information
required to be disclosed by us in our Exchange Act reports is recorded,
processed, summarized, and reported within the time periods specified in the
SEC's rules and forms, and that such information is accumulated and communicated
to our management, including our principal executive officer and principal
financial officer or persons performing similar functions, as appropriate to
allow timely decisions regarding required disclosure.

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Under the supervision and with the participation of our management, including
our principal executive officer and principal financial and accounting officer,
we conducted an evaluation of the effectiveness of our disclosure controls and
procedures as of the end of the fiscal quarter ended June 30, 2021, as such term
is defined in Rules
13a-15(e)
and
15d-15(e)
under the Exchange Act. Based on this evaluation, our principal executive
officer and principal financial and accounting officer have concluded that
during the period covered by this report, our disclosure controls and procedures
were effective at a reasonable assurance level and, accordingly, provided
reasonable assurance that the information required to be disclosed by us in
reports filed under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the SEC's rules and forms.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting that
occurred during the fiscal quarter of 2021 covered by this Quarterly Report that
has materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.

© Edgar Online, source Glimpses

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