References to the "Company," "our," "us" or "we" refer to TPG Pace Beneficial II
Corp. The following discussion and analysis of the Company's financial condition
and results of operations should be read in conjunction with the unaudited
condensed financial statements and the notes thereto contained elsewhere in this
Quarterly Report on Form 10-Q. 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
All statements other than statements of historical fact included in this
Quarterly Report on Form 10-Q including, without limitation, statements under
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. When used in this Quarterly Report on Form 10-Q,
words such as "anticipate," "believe," "estimate," "expect," "intend" and
similar expressions, as they relate to us or the Company's management, identify
forward-looking statements. Such forward-looking statements are based on the
beliefs of management, as well as assumptions made by, and information currently
available to, the Company's management. Actual results could differ materially
from those contemplated by the forward-looking statements as a result of certain
factors detailed in our filings with the United States Securities and Exchange
Commission ("SEC"). All subsequent written or oral forward-looking statements
attributable to us or persons acting on the Company's behalf are qualified in
their entirety by this paragraph.
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, and continue
to review, a number of opportunities to enter into a Business Combination with
an operating business, but we are not able to determine at this time whether we
will complete a Business Combination with any of the target businesses that we
have reviewed or with any other target business.
We intend to consummate a Business Combination using cash from the proceeds of
our initial public offering (the "Public Offering") that closed on April 16,
2021 (the "Close Date") and the private placement of our Class A ordinary shares
("Private Placement Shares") 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 March 31, 2021, we held cash of $740,000 and current liabilities of
$1,419,034. 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.
Results of Operations
For the period from January 4, 2021 ("Inception") to March 31, 2021, we incurred
a net loss of $51,396. Our business activities from Inception to March 31, 2021
consisted primarily of costs associated with our formation. Our business
activities since our Public Offering (as defined below) have consisted solely of
identifying and evaluating prospective acquisition targets for a Business
Liquidity and Capital Resources
Prior to the closing of the Public Offering (as defined below), our only sources
of liquidity were an initial sale of Class F ordinary shares (the "Founder
Shares"), par value $0.0001 per share, to our sponsor, TPG Pace Beneficial II
Sponsor, Series LLC, a Delaware series limited liability company (the
"Sponsor"), and the proceeds of a promissory note (the "Note") from our Sponsor,
in the amount of $750,000.
The registration statement for our initial public offering ("Public Offering")
was declared effective by the United States Securities and Exchange Commission
(the "SEC") on April 13, 2021. In our Public Offering, we sold 40,000,000 Class
A ordinary shares at a price of $10.00 per share, generating proceeds of
$400,000,000, including the issuance of 5,000,000 Class A ordinary shares as a
result of the underwriters' partial exercise of their over-allotment option.
Simultaneously with the effectiveness of our Public Offering, we closed the
private placement of an aggregate of 1,000,000 Class A ordinary shares (the
"Private Placement Shares"), at a price of $10.00 per share, to the Sponsor,
generating proceeds of $10,000,000.
On the Close Date, in connection with the underwriters' partial exercise of its
over-allotment option, we effected a stock dividend of approximately 0.14 Class
F ordinary shares for each Class F ordinary share, and 0.14 Class G ordinary
shares for each Class G ordinary share, such that after the underwriters'
partial exercise of its over-allotment option, the ratio of Founder Shares to
the sum of Founder Shares and Public Shares remained at approximately 25%. The
stock dividend resulted in the issuance of 555,555 Class F ordinary shares and
1,111,111 Class G ordinary shares.
On the Close Date, we placed $400,000,000 of proceeds (including $14,000,000 of
deferred underwriting discount) from the Public Offering and the Private
Placement Shares into a non-interest bearing U.S. based trust account at J.P.
Morgan Chase, N.A, with Continental Stock Transfer & Trust Company acting as
trustee (the "Trust Account") and held the remaining portion (net of offering
expenses, other than underwriting discounts, paid upon the consummation of the
Public Offering) of such proceeds outside the Trust Account.
At March 31, 2021, we had cash of $740,000 and negative working capital of
Starting January 2022, the funds in the Trust Account may be invested only in
specified U.S. government treasury bills with a maturity of 180 days or less and
in money market funds meeting certain conditions under Rule 2a-7 under the
Investment Company Act which invest only in direct U.S. government treasury
obligations (collectively "Permitted Investments").
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 Business
Combination. However, if our estimates 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 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 Class A ordinary shares at the completion of our
Initial Business Combination, in which case we may issue additional securities
or incur debt in connection with such Business Combination (including from our
affiliates or affiliates of our Sponsor).
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities which would be considered
off-balance sheet arrangements. 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.
At March 31, 2021, we did not have any long-term debt, capital lease
obligations, operating lease obligations or long-term liabilities. On the Close
Date, we entered into an administrative support agreement pursuant to which we
have agreed to pay an affiliate of the Sponsor a total of $50,000 per month for
office space, administrative and support services. Upon the earlier of the
completion of the Initial Business Combination and the Company's liquidation, we
will cease paying these monthly fees.
Critical Accounting Policies
The preparation of 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 condensed 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:
We comply with the requirements of Accounting Standards Codification ("ASC")
340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A, "Expenses of Offering."
We incurred offering costs of $799,929 in connection with our Public Offering
primarily consisting of accounting and legal services, securities registration
expenses and exchange listing fees. These costs, along with paid and deferred
underwriter discounts totaling $22,000,000, were charged to temporary equity at
the Close Date.
Net Loss Per Ordinary Share
We comply with accounting and disclosure requirements of Financial Accounting
Standards Board ("FASB") ASC Topic 260, "Earnings Per Share". Net loss per
ordinary share is computed by dividing net loss applicable to ordinary
shareholders by the weighted average number of ordinary shares outstanding
during the period, plus to the extent dilutive the incremental number of shares
of ordinary shares to settle warrants, as calculated using the treasury stock
method. At March 31, 2021, we had outstanding forward purchase contracts to
purchase up to 17,500,000 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 contracts is contingent upon the occurrence of
future events. As a result, diluted net loss per ordinary share is the same as
basic net loss per ordinary share for the periods presented.
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 financial statements.
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